Select Committee on Regulatory Reform Fifth Report

2  Background to the current regulatory reform agenda

7.  Before we began our inquiry, the National Audit Office prepared for us a paper summarising the recent history of regulatory reform.[4] As that paper makes clear, there has been considerable growth in activity in this area. In 2005, the Hampton Report[5] emphasised risk-based approaches to regulation and led to the formation of the Better Regulation Executive with a remit to "deliver better regulation and reduce unnecessary bureaucracy in both the public and private sectors." In the same year, the Better Regulation Task Force report Less is More[6] recommended, inter alia, the setting up of an administrative burdens reduction programme along the lines of the initiative adopted in the Netherlands, together with a review of the Regulatory Reform Act 2001. In response, an administrative burdens reduction programme was started in 2005, and in 2006 the Legislative and Regulatory Reform Act streamlined the processes for revising legislation and promoting better regulation. Also in 2006, the Davidson review of "gold-plating" of EU legislation reported its findings.[7] In 2007, the Government published further proposals in Next Steps on Regulatory Reform,[8] including for reviews of consumer and employment law, improving the guidance that accompanies regulation, and improving accountability of regulators. In addition, the Regulatory Enforcement and Sanctions Bill is scheduled to be enacted in July 2008. It contains a number of measures that build further on the Hampton Report.

8.  The current major UK initiatives and responsible bodies are set out in Tables 1 and 2. Improving the approach to regulation is a priority in many developed economies, but the tables illustrate the ambition and scope of the UK's agenda compared with that in other countries, and the size of the tasks that the BRE has set itself—a point that deserves full recognition. Table 3 shows BRE departmental responsibilities and budgets. Importantly, in July 2007 the BRE moved from the Cabinet Office to the Department for Business, Enterprise and Regulatory Reform (BERR). We consider the ramifications of that move in this Report.[9]

Table 1

Key elements of the BRE's Better Regulation Programme

		Working with Departments and regulators to simplify and modernise existing regulations	Working with Departments to improve the design of new regulations and how they are communicated	Working with regulators (including local authorities) and Departments to change attitudes and approaches to regulation to become more risk-based
Systems reform	Domestic	Administrative Burdens reduction programme Error! Bookmark not defined. website Programme for reducing data requests on front-line public sector workers	Embedding Impact Assessment Review of Consultation Policy Commitment to publish total costs of new regulations from April 2008 Code of Practice for Government guidance Improved communications around new regulations introduced on Common Commencement Dates Regulatory budgets	Mergers of national regulators / inspectorates Reviews of Independent Regulators Regulators Compliance Code Statutory Duty on Regulators to Address Burdens Clarifying regulatory priorities for local authorities Establishing Local Better Regulation Office
	EU	25% EU Admin burdens target. Davidson Review for reducing burdens in stock of EU legislation	Ongoing work to improve Impact Assessment in the EU	Building on relationship with other members states to promote overall improvements in European regulatory reform
Interventions around specific policy areas	Domestic	Consumer Law Review Review of impact of Health & Safety regulations on low-risk businesses Support for Flanagan Review of Policing	Ongoing engagement between BRE staff and departments on the development of new domestic and EU policy Clearance of new regulations by the Panel for Regulatory Accountability	Retail Enforcement Pilot
	EU	Will potentially follow from EU Admin burdens work

BRE's communications programme is cross-cutting and spans all elements of the programme.

Table 2: Roles and Responsibilities
COORDINATION	IMPLEMENTATION	SCRUTINY
The Better Regulation Executive: Project manager and coordinator for the various regulatory reform initiatives. Issues guidance on impact assessments, provides advice to departments and monitors compliance with IA requirements.	Departments: Primary responsibility for delivering high quality regulation. Each department has: A Better Regulation Minister who is accountable for the wider better regulation agenda. A Better Regulation Board Level Champion, to promote to board members the wider better regulation agenda. A Better Regulation Unit (BRU) supporting policy teams in delivering reductions in administrative burdens and the wider better regulation agenda. The BRUs act as the liaison point for the BRE and have responsibility for working with policy teams to identify and implement measures to reduce administrative burdens by 2010.	The Panel for Regulatory Accountability The PRA is a Cabinet Sub-Committee, chaired by the Chief Secretary to the Treasury, which was set up to ensure that proposals which imposed a significant regulatory burden on business, the public sector or the third sector are considered collectively. Provides scrutiny of departmental simplification plans and major policy proposals which are likely to impose a cost of over £20 million per annum or disproportionately impact a particular sector. ___________________________ National Audit Office: Works on behalf of Parliament to hold Government to account. Examination of various aspects of the regulatory reform agenda. The Regulatory Reform Committee: Provides parliamentary scrutiny of matters relating to regulatory reform. The Public Accounts Committee: Examines NAO reports - in February 2008, the Committee examined the NAO report on the Administrative Burdens Reduction Programme.

Table 3: BRE Departments and budget breakdowns

Budget 2008/09	Total Administrative	Programme	Responsible for delivering:
Regulatory Reform Directorate	£2,400,416	-	Administration burdens reduction programme, including coordination of Simplification Plans. Public sector strategy, including data stream reduction and the public sector compliance code. Dedicated account teams working with departments on the design of new regulation, including embedding and scrutinising impact assessments. Improving small business regulation. Review of consultation policy. EU Regulatory Reform, including the EU 25% admin burdens target, work to improve the EU Impact Assessment and working with Departments and EU institutions to improve regulation and its implementation. Panel for Regulatory Accountability.
Regulatory Innovation Directorate (includes the Regulatory Enforcement and Sanctions Bill Team and responsibility for the Local Better Regulation Office)	£2,984,535	£4,400,000	Projects to improve existing regulation, including: Consumer Law Review Health and Safety review Secretariat to the Killian/Pretty independent review of planning (with CLG). Projects to improve the design and implementation of regulations, including: Regulatory Budgets Work with the OCC on Climate Change Secretariat to Sarah Anderson's independent review of guidance Improved communications around Common Commencement Dates Regulatory Enforcement and Sanctions Bill and its implementation. Reviews of how regulators are implementing the Hampton vision. Regulator's compliance code. Economic regulators policy. The Local Better Regulation Office
Strategic Communications	£668,176	-	New communications strategy - designed to improve two-way communication with the outside world on Better Regulation
Strategic Support Team	£694,873	-	Chair and Chief Executive and their private office. HR, recruitment, financial and performance management. (Includes the BRE's Central training programme) Coordination of the Senior Management Team. Overview of business planning and overall strategy.
	£6,748,000[10]	£4,400,000

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4   http://www.nao.org.uk/publications/Reg_Reform_Brief.pdf Back

5   http://www.hm-treasury.gov.uk/media/7/F/bud05hamptonv1.pdf Back

6   http://www.berr.gov.uk/files/file22967.pdf Back

7   See paragraph 87 Back

8   http://www.berr.gov.uk/files/file44370.pdf Back

9   See paragraphs 23 to 25 Back

10   The administrative budget is subject to some upward revision in order to implement Regulatory Budgets Back

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Prepared 17 July 2008