House of Commons - Regulatory Reform

Select Committee on Regulatory Reform First Special Report

2 Slow progress on regulatory reform orders

14. There has been a lengthy break in the progress of the Government's regulatory reform programme during the 2003 calendar year. Prior to the date of this report, only three proposals had been laid for first-stage scrutiny in 2003, on 13 January, 13 March and 14 October.[9] No draft order was laid for second-stage scrutiny between 20 April and 17 September.[10] In the 2002-03 year, only 17 items were laid under the 2001 Act: nine proposals and eight draft orders.[11] This means that regulatory reform items were laid in only about one of every three weeks in which the House sat. Twenty-three sitting weeks passed without the Government laying any regulatory reform items before the House.[12]

15. This break in the regulatory reform programme has serious implications for our own work programme, which is of necessity almost entirely dependent on the rate of progress of the Government's own programme. For the past six months or so, we have had little or no business before us. This has been frustrating, particularly given that, in May 2002, the Government estimated that "perhaps up to 40" regulatory reform orders would be due for completion in 2003.[13] Furthermore, if the Government is to meet its Public Service Agreement (PSA) targets, this "trough" in the regulatory reform programme will no doubt necessitate a forthcoming "peak" in the numbers of proposals due to be laid over the next two years. The Cabinet Office's PSA commits it to delivering over 60 regulatory reform orders by 2005:[14] to date, only 14 orders have been made.

16. In order to meet its PSA target of 60 regulatory reform orders, the Cabinet Office initially aimed to have made at least 40 orders by March 2004. It now appears that it is aiming to deliver only 26 orders by that date.[15] Consequently, if the Cabinet Office is to achieve its PSA target, a further 34 regulatory reform orders must be made in the 21 months between April 2004 and December 2005. The Minister told us that the Government remains committed to achieving this target, which he described as "stretching but achievable".[16] We expect the Government to take care in assessing the achievability of its programme for delivery of regulatory reform orders, in light of the conventions that have developed which are intended to ensure a regular and even flow of regulatory reform items before this Committee. We would consider it most unfortunate if the target of 60 regulatory reform orders by 2005, combined with the hiatus of the past six months or so, were to result in an unreasonably high level of regulatory reform business coming before the House over the next two years. Such an increase could well result in regulatory reform orders receiving a less rigorous degree of parliamentary scrutiny than might otherwise be appropriate.

Reasons for lack of progress

17. We discussed with the Minister some possible reasons for lack of progress on the regulatory reform programme. There does not seem to us to be a drying up of ideas for potential regulatory reform orders. In February 2002, the Government outlined 63 proposals for regulatory reform orders in its Regulatory Reform Action Plan (RRAP). Of the 62 proposals remaining,[17] only 13 have been completed; of the remaining 49, 39 are currently at some stage of the regulatory reform procedure,[18] meaning that ten are, presumably, under initial development. The RRAP is due to be updated and re-issued in November 2003, and will presumably contain further new proposals for regulatory reform orders.

18. We consider that the Minister went part of the way towards explaining the Government's lack of progress when he observed that the operation of the Act:

19. We agree that the requirements of the Regulatory Reform Act are such that departments would be well advised to allocate a significant amount of resource at the early stages of developing a regulatory reform proposal. The Act requires departments to issue a consultation document before proceeding to lay a proposal for a regulatory reform order before Parliament. In order to ensure that the consultation undertaken on a proposal is adequate, in terms of Standing Order No. 141(6), departments need to have a very clear idea of the changes they propose to make to the existing law. The proposed regulatory reform order therefore needs to be in an advanced state of development before consultation is embarked upon. This contrasts with the established process for generating traditional legislative proposals, where comments on policy can be invited when the policy is at a less advanced stage of development.

20. We accept also the Minister's observation that departments are still "on a learning curve" in using regulatory reform orders and that, consequently, principles and precedents are still in the process of being developed.[20] We welcome the Minister's strong commitment to encouraging departments in the ongoing development of common principles to be applied to proposals for regulatory reform orders.

21. It seems clear to us that much of the potential of the regulatory reform procedure is yet to be exploited. We are concerned by the comment in the Cabinet Office memorandum that regulatory reform orders "are usually not high profile reforms and work [on them] is sometimes done by less experienced officials."[21] If the Government is to achieve its target of delivering a further 46 regulatory reform orders by the end of 2005, departments must focus their efforts on recognising and meeting the particular requirements of the regulatory reform procedure. The RIU has a key role in play in assisting departments in this respect. In this context, we are pleased to hear that the Government's general guidance on the regulatory reform procedure has been updated and is shortly to be released.[22]

22. Equally, departments must be prepared to recognise that regulatory reform orders propose reform to primary legislation and that, consequently, they require the attention of suitably experienced officials. As the Minister himself acknowledged, it is important:

The Government's future programme

23. At the time at which we heard from the Minister, the Government anticipated laying 12 new proposals for regulatory reform orders by the end of 2003.[24] It expected at least ten of these to be in force by April 2004. Two of the proposals (Fire Safety and Patents) are described in the memorandum as "quite complex" and "long".

24. At the time of this report to the House, only two of these 12 proposals had been laid.[25] Consultation on two of the proposals had not yet started.[26] Given that only eight sitting weeks remain in 2003, and that at least three of the proposals are too complex to be laid in the same week as any other proposal, we conclude that the Government's future programme for laying proposals for regulatory reform orders is already slipping. We draw this matter to the attention of the House.

9 The proposal for the Regulatory Reform (British Waterways Board) Order 2003 was laid on 13 January; the proposal for the Regulatory Reform (Gaming Machines) Order 2003 on 13 March, and the proposal for the Regulatory Reform (Sunday Trading) Order 2004 on 14 October. Back

10 The draft Regulatory Reform (British Waterways Board) Order 2003 was laid on 20 April; both the draft Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 and the draft Regulatory Reform (Gaming Machines) Order 2003 were laid on 17 September. Back

11 These items are listed in Annex 1. Back

12 The House sat for 35 of those 52 weeks, not counting the recall of 24 September 2002. Regulatory reform items-that is, proposals and draft orders-were laid in 12 of those 35 weeks; in five of those weeks, two items were laid. Back

13 Second Special Report of Session 2001-02, The Operation of the Regulatory Reform Act: Government Response to the Committee's First Special Report of Session 2001-02, HC(2001-02)1029, para 2.12 Back

14 Appendix 1, para 4.3, although it is unclear whether this target refers to the end of the 2004-05 financial year or the end of the 2005 calendar year. For the purposes of this report, we have assumed that it refers to the latter. Back

15 Appendix 1, Annexes A and E Back

16 Q1 Back

17 The RRAP listed 63 proposals for regulatory reform orders; since then, 16 new proposals have been added, one has been dropped and 16 have been taken forward by other means. Back

18 These 39 proposals are listed at Appendix 1, Annexes A and B. Back

19 Q 4 Back

20 Q 5 Back