From an H&S point of view I would be neutral. Providing that you implement maintenance schedules in line with manufacturer's recommendations and the people doing the work are competent and have access to adequate resources to carry out the maintenance work safely then in theory there is nothing wrong with it. Having an on site engineer who can fix problems quickly may even be an advantage by making FLT drivers more willing to raise issues. I would be more sceptical about it being cost effective to spend the money on training someone up to be a FLT service engineer unless you have a fairly large number of trucks. What happens if he leaves? What other work is he doing that may suffer for working on FLT's? One last point, LOLER checks on the lifting parts of the truck is a whole different kettle of fish from changing the oil/batteries, etc. Your USA office may not be aware of the particular requirements of this legislation I'm guessing.

Tell them that unlike Federal and State OSHA in the USA, which generally have about as many teeth as a goldfish, the UK takes Health and Safety offences seriously and even though they are in the USA, the company will be in deep poop in the event of a serious incident. Point out to them that whereas a fatality might result in a paltry fine of a few $1,000 over there, the UK will fine in proportion to the company takings (not profit) so it will hurt big time. Further advise them of the increases in penalties that come in next February.