ACC wastes millions on a cosy deal with Business NZ and the CTU

Material 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, available and summarised below 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.

It appears that Business NZ and the CTU have created a nice little earner for themselves. But we think it's a disgraceful example of big corporate and union welfare chewing through taxpayer cash. We think members of Business NZ and the CTU should be asking hard questions of their respective management teams.

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.

This is the worst example of government waste the Taxpayers’ Union has seen to date. It involves two quasi-political organisations from the left and the right complacent in receiving taxpayer funds, likely knowing that the benefit was a small fraction of the amount being spent.

The Taxpayers' Union is calling on Ms Collins to put an end to this hand out to Business NZ and the CTU.

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 estimates that it has spent $19 million on the programme since 2003. The spending per provider since 2008 is:

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.

Summary of the documents 

ACC Briefing Paper: Health & Safety Representative Training

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.

Judith Collins briefing paper and appendix

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.

Contracts between ACC and CTU and Business NZ

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.

Research New Zealand Health and Safety Representative Training Evaluation Draft Final Report 10 March 2008

Letter from ACC detailing the amounts spent per provider

Cover letter from ACC to Taxpayers' Union (see page 3 for details of amount spent per vendor since 2008).