Cost of a Life

Please see our latest press pack for ‘Cost of a life’ as we always include this.

For 2014 please see page 11 of our press pack http://www.co-gassafety.co.uk/press_pack_2014.html

Explanation of the principle behind cost of a life.

Government works out the cost of a life in order to decide whether certain changes, which might prevent death are economically viable. This seems brutal but most people seem to accept that huge amounts of Government money will not if the lives saved are very small in number. However, when trying to find out how Government calculates lives lost to carbon monoxide poisoning, it seems that there are two Government departments (Health & Safety Executive and the Deprtment of Transport) that calculate the cost benefit analysis and that there are differences between the two.

Ian Spencer from the HSE has very kindly tried to explain the reason for these differences and has agreed to allow us to publish his explanation below.

From:Ian.Spencer@hse.gsi.gov.uk
Sent:10 January 2012 15:09
To:CO-Gas Safety
Subject:RE: Cost of a life – cost of death – URGENT for press pack

Stephanie,

hope the conversation helped explain the likely causes of differences between HSE’s and DfT’s injuries value, and best of luck with your ongoing work. As discussed, here is the info I promised you:

1) see http://www.hse.gov.uk/statistics/pdf/cost-to-britain.pdf tables 11 to 13 for values split by individuals, employers, and government.

2) some reasons why the HSE value of a prevented fatality (VPF) can be different to Department for Transport’s:

2.i) firstly, we would expect there to be some difference in lost income, as we are comparing the average values for different groups of people, with different age and gender profiles, so with different income characteristics.

2.ii) Second, comparing VPFs should be compared in the same year. Comparing with DfT’s VPF in 2009, they are not all that different:

DFT source: http://www.dft.gov.uk/webtag/documents/expert/unit3.4.1.php#021

Injury severity Fatal
Lost output 545,040
Human costs 1,039,530
Medical & ambulance 940
Total 1,585,510

HSE source:

Workplace fatal accident
Non financial human cost (rounded) 1,004,000
Financial cost (rounded) 498,000
Total coast (rounded) 1,502,000

You will see that we use the same human cost component, and that for 2009 values, HSE’s ‘financial cost’ (which is basically the lost output plus the small component of other costs) is broadly the same as DfTs. We have not conducted detailed comparison of models, but the remaining difference may be due to age profile differences, and/or methodological differences.

2.iii) DfT had a review of their VPF in 2011, see  http://www.dft.gov.uk/publications/updating-value-of-a-vpf-and-vpi and so may have made changes to their method of producing a VPF.

Hope this helps. Happy for you to reflect any of this in your work.

Ian.

Ian Spencer
Economic Analysis Unit
Health and Safety Executive
Office: 0131 247 2104
Mobile: 07507837969
Email: ian.spencer@hse.gsi.gov.ukHSE Economics website: http://www.hse.gov.uk/economics/


From: CO-Gas Safety [mailto:office@co-gassafety.co.uk]
Sent: 09 January 2012 17:26
To: Ian Spencer
Cc: Office at CO-Gas Safety; paul overton; Amy Henson
Subject: RE: Cost of a life – cost of death – URGENT for press pack

Dear Ian

It was a real help to have your instructions about scrolling down and see the figures. Thank you.

However, the difference is huge.

The Department of transport figures for 2008 were

*Please note that the most recent figures are for 2008 and these are:-

‘Cost of a life’ is £1,683,810, serious injury £189,200, slight £14,590 with an average of all injuries being £34,496. Please see

http://www.webtag.org.uk/webdocuments/3_Expert/4_Safety_Objective/3.4.1-draft.htm

Whereas the HSE figures for 2009 are :-

* Workplace fatal accidents £1,502,000

Reportable injuries £17,400 (all CO is reportable)

http://www.hse.gov.uk/economics/eauappraisal.htm

Can you please help us to explain these huge differences?

Best Wishes

Stephanie

Stephanie Trotter, OBE (Mrs)
President & Director of CO-Gas Safety
CO-Gas Safety is an independent registered charity run almost entirely by volunteers.
www.co-gassafety.co.uk

Company Number 3084435
Charity Number 104370
Tel. 01372 466135
Mob. 07803 088688

DISCLAIMER:

The information in this e-mail is confidential and may be read, copied or used only by the intended recipient(s). If you have received it in error please contact the sender immediately by returning the e-mail or by telephoning a number contained in the body of the e-mail then and please delete the e-mail without disclosing its contents elsewhere. No responsibility is accepted for loss or damage arising from viruses or changes made to this message after it was sent.


From: Ian.Spencer@hse.gsi.gov.uk [mailto:Ian.Spencer@hse.gsi.gov.uk]
Sent: 06 January 2012 11:45
To: CO-Gas Safety
Cc: paul.overton5@googlemail.com
Subject: RE: Cost of a life – cost of death – URGENT for press pack

Stephanie,

Glad you found them.

The main appraisal values reflecting total cost to society include all the costs that we could reasonably robustly include and include costs to individuals, employers and Government. We call these the Cost Bearers.

These should be fine to use in CBA.

The appraisal values for each cost bearing group are separate – they only reflect the portion of cost relating to a particular cost bearer, e.g. individuals, and therefore miss out all of the other costs.

If you use the main appraisal values, then these should be appropriate.

Ian.

Ian Spencer
Economic Analysis Unit
Health and Safety Executive
Office: 0131 247 2104
Mobile: 07507837969
Email: ian.spencer@hse.gsi.gov.uk

HSE Economics website: http://www.hse.gov.uk/economics/


From: CO-Gas Safety [mailto:office@co-gassafety.co.uk]
Sent: 06 January 2012 11:38
To: Ian Spencer
Cc: Office at CO-Gas Safety; paul overton
Subject: RE: Cost of a life – cost of death – URGENT for press pack

Dear Ian

Thanks so much. Yes I found it perfectly this time thanks to your kind instructions.

However, I am a little concerned about the Para below* and wonder if we would be after all better off using the DoT figures. Any thoughts or fuller explanation on this would be gratefully received – I might include both!

Best Wishes

Stephanie

*The Costs to Britain cost model also produces Appraisal Values for the broad groups that bear part of the overall cost to society: individuals, employers and the Government (the ‘cost bearers’). These Appraisal Values reflect only the costs to one of the cost bearers and do not take into account the net effects of transfers, such as benefits payments from government to individuals. They therefore are not normally suitable for sole use in social cost benefit analysis of interventions. However it can be useful to demonstrate the impact of a policy on a particular group within distributional analysis – for example using the costs to employers’ Appraisal Values to estimate the value of any avoided injury or ill health (i.e. the benefits). Indeed enquiries to HSE on the costs of work related injuries and ill health often request the cost to only one group, such as ’employers’ or ‘workers’.

Dear Ian

Thank you very much indeed for your swift response.

I am really sorry but I’ve tried and I can’t seem to find the costs of fatalities, major and minor injuries. Is there any chance you can help with this to find the right table or has this changed completely? If you look at our cost benefit analysis, we have taken the cost of fatalities and the total cost of injuries (averaged out between major and minor by adding them all up and dividing them). I don’t see how I can do this on this new material but perhaps I just haven’t found the right table…any help would be much appreciated.

Best Wishes

Stephanie

Stephanie Trotter, OBE (Mrs)
President & Director of CO-Gas Safety
CO-Gas Safety is an independent registered charity run almost entirely by volunteers.
www.co-gassafety.co.uk

Company Number 3084435
Charity Number 104370
Tel. 01372 466135
Mob. 07803 088688

DISCLAIMER:

The information in this e-mail is confidential and may be read, copied or used only by the intended recipient(s). If you have received it in error please contact the sender immediately by returning the e-mail or by telephoning a number contained in the body of the e-mail then and please delete the e-mail without disclosing its contents elsewhere. No responsibility is accepted for loss or damage arising from viruses or changes made to this message after it was sent.


From: Ian.Spencer@hse.gsi.gov.uk [mailto:Ian.Spencer@hse.gsi.gov.uk]
Sent: 05 January 2012 17:45
To: CO-Gas Safety
Cc: Alan.Spence@hse.gsi.gov.uk; Anna.Barnes@hse.gsi.gov.uk
Subject: FW: Cost of a life – cost of death – URGENT for press pack

Dear Stephanie,

Thank you for your enquiry. We have just published the new estimated relating the values of a prevented fatalities, injuries and ill health.

http://www.hse.gov.uk/economics/eauappraisal.htm

Please get back in touch if this does not answer your questions.

Best regards,

Ian.

Ian Spencer

Economic Analysis Unit
Health and Safety Executive
Office: 0131 247 2104
Mobile: 07507837969
Email: ian.spencer@hse.gsi.gov.uk

HSE Economics website: http://www.hse.gov.uk/economics/


From: CO-Gas Safety [mailto:office@co-gassafety.co.uk]
Sent: 05 January 2012 15:53
To: Alan Spence
Cc: Office at CO-Gas Safety
Subject: Cost of a life – cost of death – URGENT for press pack

Dear Alan Spencer

Please could you let us know if the figures have changed?

You may recall that I wrote last year about the following:

*Please note that the most recent figures are for 2008 and these are:-

‘Cost of a life’ is £1,683,810, serious injury £189,200, slight £14,590 with an average of all injuries being £34,496. Please see

http://www.webtag.org.uk/webdocuments/3_Expert/4_Safety_Objective/3.4.1-draft.htm

Serious cases 26,034    X                                  £189,200 = £4,925,632,800

Slight cases  202,333    X                                    £14,590 = £2,952,038,470

Total cases = 228.367                                                              £7.877,671,270

£7,877,671,270 divided by 228.367 = £34,496 per case on average

The reference does not work. Can you please give me something that does work? Have the figures been changed and updated?

Thank you.

Best Wishes

Stephanie

Stephanie Trotter, OBE (Mrs)
President & Director of CO-Gas Safety
CO-Gas Safety is an independent registered charity run almost entirely by volunteers.
www.co-gassafety.co.uk

Company Number 3084435
Charity Number 104370
Tel. 01372 466135
Mob. 07803 088688

DISCLAIMER:

The information in this e-mail is confidential and may be read, copied or used only by the intended recipient(s). If you have received it in error please contact the sender immediately by returning the e-mail or by telephoning a number contained in the body of the e-mail then and please delete the e-mail without disclosing its contents elsewhere. No responsibility is accepted for loss or damage arising from viruses or changes made to this message after it was sent.

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