HSE estimates £14.3 billion
Posted on: 18/11/2015 By: Lee Rance
The main reason for Health and Safety law is to protect workers from harm but there are also financial benefits when companies employ and maintain a robust Health and Safety management system.
The HSE estimate £14.3 billion was lost in 2013/14 due to injuries and ill health. The total economic cost of workplace injuries and ill health includes both the financial costs incurred and a valuation of the human costs.
There are a great many factors that make up this figure, it’s not just time off work. Other things such as lost production and healthcare costs also factor. The £14.3 billion is split into injury (£4.9bn) and illness (£9.4bn). The majority of costs fall on individuals (£8.2bn) while employees (£2.8bn) and government (£3.4bn) make up the rest.
When you start to dig deeper into the statistics you begin to realise how this massive figure is reached:
The individual may lose family income while off sick, either temporary or permanent dependent on injury. There may also be other costs to the individual or the individual’s family including prescription charges, travel expenses, home expenses or funeral expenses. There could also be a cost involved in administration of insurance, compensation or benefits claims. Probably the biggest cost is the non-financial human cost which represents the value of ‘human costs’, sometimes described as ‘pain, grief and suffering’ and loss of wellbeing to themselves, their friends and family. For most people no amount of money could be compared to the death, serious illness or serious injury of a family member.
The employer will incur occupational sick pay or statutory sick pay costs and will have to reorganise their business to cover the absent employee. This could involve recruitment and induction costs. There may be a loss of production. The employer could also face increased Employers Liability Insurance premiums. They may also have to pay increased premiums for corporate private health insurance. Administration costs for sick pay, insurance and compensation claims. There could also be HSE or local authority costs including investigation/prosecution costs, legal expenses and fines.
The government may have to pay benefits to the individual and will also be receiving less income tax and national insurance. There may be NHS costs which could include treatment and rehabilitation. There may also be charges for administration of statutory sick pay and benefits claims.
Businesses that are managing work-related risks and are do everything they can to prevent injuries and ill-health at work are not only protecting their workforce but are avoiding unnecessary costs for themselves and the economy.
Until next time