ACC Wastes Millions On Cosy Deal with Big Business & Unions
MEDIA RELEASE
ACC Wastes Millions On Cosy Deal with Big Business and Unions
14 JANUARY 2014
EMBARGOED UNTIL MIDDAY
Figures released by the Taxpayers’ Union show a cosy deal between Business New Zealand, the Council of Trade Unions (CTU) and ACC has cost ACC-levy payers $19 million since 2003.
The documents, released today, show ACC knew that millions paid to Business NZ and the CTU to provide health and safety training did little, if anything, to reduce workplace accidents.
Recent ACC analysis concludes that even with optimistic assumptions, for every dollar spent on the training, 84 cents is wasted.
A 2013 briefing to the Minister for ACC, Judith Collins, states that the CTU has found it “challenging” to meet its performance obligations even though it has been contracted for service since 2003.
The documents show that Business NZ and the CTU worked together with ACC to create the venture and doubts about the value of the scheme have existed since at least 2008.
“Business NZ and the CTU have created a nice little earner for themselves,” says Taxpayers’ Union Executive Director Jordan Williams. “It’s a disgraceful example of big corporate and union welfare chewing through taxpayer cash.”
“Even the report in 2008 shows that that whole scheme was achieving little more than ‘engagement’. While ACC, Business NZ and the CTU must have known the scheme was worthless, they all allowed further millions to be spent.”
“We are staggered that Business NZ is taking taxpayer cash for something it must know is a complete waste of money. The ACC documents we've uncovered show that, at best, only 16 cents of every dollar spent did any good.”
“While Helen Kelly is supposed to be standing up for the health and safety interests of her members, her organisation is taking millions of dollars from ACC for worthless services it still struggles to provide after 10 years.”
“Health and safety is the responsibility of every business, why should Mum and Dad taxpayers subsidise big businesses and unions to comply with the same health and safety laws as everyone else?”
“The Taxpayers’ Union urgently call on ACC Minister, Judith Collins to put an end to this outrageous hand out to New Zealand’s largest business lobby group and trade unions.”
The documents obtained under the Official Information Act are being publicly revealed for the first time. Scanned copies of the documents are available on request and will be available atwww.taxpayers.org.nz from noon.
SUMMARY OF THE DOCUMENTS
ACC Briefing Paper: Health & Safety
Representative Training
From: John Beaglehole, General
Manager, Insurance and Prevention Services
To: Minister
for ACC
Dated: 10 May 2013
Summary:
• ACC has
contracted providers to train Health & Safety
representatives from 2003. Since then, this training has
cost ACC an estimated $19m.
• ACC currently contracts
the following providers to supply Health & Safety
representative training to employees:
• Business New
Zealand;
• New Zealand Council of Trade Unions
(“CTU”); and
• Impac Services Ltd (a private
training provider).
• The CTU has been involved with
ACC’s training programme for Health & Safety
representatives since 2003.
• The CTU has found it
challenging to train the number of employees in key
industries that they have been allocated funding for. ACC
has met with senior managers at CTU to ensure that contract
standards are maintained.
• ACC reviews of the Health
& Safety representative training programme indicate that the
observed effects of the programme were “small in size and
were inconsistent in direction to be considered
effective.”
• Poor data quality between 2003/2004
and 2007/2008 has prevented ACC from being able to determine
the return on investment for the estimated $12 million spent
on the training programme during this time. ACC is treating
this expenditure as “sunk costs.”
• ACC
acknowledges that workplace claims have decreased, including
in workplaces and industries where no ACC safety or
workplace activity has occurred.
• ACC’s Business
Intelligence unit estimate that even if the Health &
Safety training programme was responsible for a 50%
reduction in workplace claims, ACC would have effectively
lost 84 cents for every dollar invested in the
programme.
Contracts between ACC and the
providers
• The contacts appear to show that
some of the CTU key performance indicator targets were lower
than the equivalents contained in the contracts between ACC
and Business New Zealand and Impac Services
Ltd.
Research New Zealand: Health and Safety
Representative Training Evaluation Draft Final
Report
Date: 10 March
2008
• The report focuses mostly on the rate and type
of information trainees had retained after the
training.
• “While ACC has some projected claim
reduction rates (e.g. a 4.79 percent reduction in claims for
2006/07 – based on the Net Cost Analysis tool), it has
acknowledged that the Workplace Health and Safety
Representative Training Programme is unlikely to reduce
injuries in isolation of other workplace interventions.
Therefore, the key measure for WorkSafe Health and Safety
Representative initiative is its success in building
employee capacity to engage in the health and safety
management process.”
• Shows that the initiative was
developed in collaboration with CTU and Business New
Zealand.
Q&A
What is the training for?
Three organisations (Impac Services Ltd, the CTU and Business NZ) are contracted to provide health and safety representative training within workplaces. The training was in response to the amended Health and Safety in Employment Act (2002) that came into force in May 2003 and requires employers to allow employees a reasonable opportunity to participate in the improvement of health and safety practises at work.
As part of the employee participation system, employees may choose to elect a health and safety representative. Under the Act, each health and safety representative is entitled to two day’s paid leave per year to attend an approved health and safety training course.
In collaboration with the CTU and Business NZ, ACC developed and funded the delivery of a two-course programme for business enterprises with greater than 29 FTE’s.
Who is entitled to the training?
Businesses who employ 29 or more full-time equivalent staff are entitled to receive training from one of the three organisations.
Who pays for the training?
Businesses are not charged for the training. ACC pay about $350 per person.
What is the training supposed to achieve?
The training initiative is based upon the premise that employee participation in the management of workplace health and safety will lead to improved workforce practices and safer working environments.
How much has been spent?
ACC estimate that it has spent $19 million on
the programme since 2003. The spending per provider since
2008 is:
Entity | 2008 - 09 | 2009 - 10 | 2010 - 11 | 2011 - 12 | 2012 - 13 |
Business NZ | $633,160 | $291,095 | $386,665 | $389,075 | $351,945 |
CTU | $1,317,100 | $502,725 | $699,130 | $685,525 | $717,165 |
Impac Services | $464,915 | $393,815 | $456,620 | $442,795 | $475,185 |
How is the performance of the vendors assessed by ACC? What were CTU having difficulty fulfilling?
Providers are assessed on (1) the feedback from trainees and employers; (2) the type and level of participants; and (3) using the allocations of funding within the allocated timeframes.
Who has benefited from the spending?
Not workers. ACC has found that there has been a reduction in claims even in workplaces where no safety or workplace activity has occurred.
Even if the training was responsible for 50% of the reduction in accidents, at best only 16 cents of every dollar spent did any good.
Is the spending value for money?
No. ACC’s Business Intelligence unit estimate that for every dollar invested into the programme, taxpayers are losing 84 cents.
ENDS