Select Committee on Regulatory Reform Written Evidence

Memorandum submitted by the Food Standards Agency


    —  The FSA welcomes the Regulatory Reform Committee's inquiry into the Better Regulation Executive (BRE) and the regulatory reform agenda.

    —  The FSA supports the Government's drive for regulatory reform providing it does not detract from the FSA's statutory duty to protect consumers.

    —  The FSA believes that the BRE has a role in co-ordinating cross-Government initiatives, whilst allowing Departments and regulators the space to develop their own initiatives which will benefit those businesses they directly regulate.

    —  The FSA welcomes the close working relationship it has with the BRE, which has to take into account the FSA's unique status as both a non-Ministerial Government Department and an independent regulator.

    —  The FSA believes that the BRE's approach to measuring and reporting on performance and outcomes is sufficiently robust, but the BRE needs to consider the burden multiple processes can have on Departments and regulators.

    —  The FSA considers that the current agenda is delivering real outcomes for businesses. Businesses will find the implementation of regulations easier which means there will be greater compliance. This in turn will deliver increased consumer protection.

Food Standards Agency

April 2008


  1.  The statutory objective of the Food Standards Agency (FSA) is to protect public health from risks which may arise in connection with the consumption of food and drink (including risks caused by the way in which food is produced and supplied) and otherwise to protect the interests of consumers in relation to food.

  2.  The FSA was set up in April 2000 against a background of loss of public confidence in the regulatory system for food safety and standards. This was attributed, at least in part, to public suspicion that critical decisions about food safety were being taken behind closed doors, evidence for action was not transparent, costs and benefits were not calculated, and that less weight was given to protecting consumers than to protecting the interests of the food industry. The result of this loss of confidence was a proliferation of "food scares" that not only damaged consumer confidence, but also led to market instability and threatened the interests of the UK food industry itself.

  3.  For this reason the FSA was deliberately set up as a separate Government Department, at arm's length from the political process (although accountable to the Westminster Parliament and to devolved equivalents through, but not to, health Ministers) and with a clear objective. The independence of the FSA is given effect both by its formal status as a non-Ministerial Government Department, led by a Board appointed by Ministers to act in the public interest, and by its powers to publish information and advice. The power to publish extends to the FSA's advice to Ministers, ensuring that it is evidence-based and free from undue influences. The FSA's powers to publish are coupled with a duty to ensure that consumers are kept informed and advised about matters that significantly affect their capacity to make informed decisions about food.

  4.  The FSA's role as an independent regulator is to set the regulatory framework: food businesses are responsible for ensuring they do not sell unsafe food. The FSA sees as the ideal a balanced and effective market where businesses manage food safety hazards; empowered consumers have the accurate and useable information they need to make choices; and the regulator intervenes only where the benefits of doing so justify the action—for example to counter food fraud and the risks it poses to public health, to consumer confidence, and to the economic wellbeing of honest businesses.

  5.  There are a range of benefits that the FSA takes into account when deciding whether action is justified. These include the potential for improvements to public health; potential savings to the public purse; other benefits to consumers such as improved choice; and potential benefits to industry and other stakeholders, such as improved consumer confidence in food and the way it is regulated. It is into this complex environment that the FSA balances the delivery of the regulatory reform agenda.

The FSA and the regulatory reform agenda

  6.  Since it was established the FSA has followed the principles of good regulation of proportionality, accountability, consistency, transparency and targeting. The FSA's founding legislation requires it to assess the costs and benefits of any action it proposes to take through Impact Assessments (and formerly Regulatory Impact Assessments) which are published on our website so that others can comment on and challenge our regulatory activity.

  7.  The FSA fully supports the Government's regulatory reform agenda. This agenda helps the FSA deliver its statutory objective of consumer protection by making regulations easier and less costly to implement. This means that more businesses will comply which in turn should deliver greater consumer protection.

  8.  In September 2006, the FSA Board agreed that the Agency should reduce the administrative burden of its regulations by 25% by 2010, in line with all other Government Departments. The FSA operates so that regulation is viewed as an end to end process from policy design through to enforcement on the ground. The FSA welcomed the Hampton Report and its focus on improving the enforcement of regulation. Since it had considered how the policy making process could be improved through the principles of good regulation, it was important that the BRE considered how the enforcement end could be improved. The Hampton Report makes an important contribution to the debate.

  9.  The FSA also supported Hampton's proposals that the number of regulators should be rationalized. The FSA merged the Wine Standards Board into the FSA two years ahead of the deadline to ensure maximum benefits were passed onto businesses as soon as possible.

  10.  In common with other Government Departments the FSA publishes an annual Simplification Plan. The most recent, published in December 2007, estimated total simplification savings of up £448 million. Of this, £232 million will be savings for business and £216 million for the public sector.

  11.  Aside from incorporating the Government's regulatory reform agenda into its work, the FSA initiates better regulation projects of its own which are specifically targeted at the food sector. In 2007 the FSA carried out:

    —  a major review of its guidance for businesses to make sure that it does not impose unnecessary burdens and is of real help to businesses. The Government announced a similar review in its 2008 Budget;

    —  a review which looked at the burden of regulation on butchers and craft bakers (the FSA's sector specific review) so that targeted solutions could be developed; and

    —  a review of the forms businesses are asked to fill out by the FSA, with the aim to remove unnecessary forms and simplify those that remain.

The FSA's relationship with the Better Regulation Executive (BRE)

  12.  The FSA maintains a good working relationship with the BRE at all levels. The FSA Chair and Chief Executive have biannual meetings with their BRE counterparts and the FSA Chair has often spoken at events organised by the BRE to promote the better regulation agenda. The FSA's Director of Strategy and Resources attends the BRE's Board Level Champions meetings, and the FSA's Regulation and Consultation Branch work closely with colleagues in all parts of the BRE.

  13.  In 2007 the FSA seconded staff, one at Director level, to the BRE to assist in their Hampton Implementation Reviews.

Has the BRE developed a coherent strategy for implementing regulatory reform?

  14.  The FSA believes that the BRE is fully committed to delivering regulatory reform across the UK economy. This is demonstrated by the wide variety of initiatives introduced since it was set up in 2006. The BRE has maintained the momentum since it moved from the Cabinet Office to the Department of Business, Enterprise and Regulatory Reform.

  15.  The BRE's approach can at times appear to be driven by the need to introduce new initiatives before older initiatives have had time to deliver fully the benefits intended. Whilst the BRE's approach is driven by the needs of business, the FSA has to balance this with its own statutory objectives of protecting consumers. To date the FSA has found innovative ways to balance the different objectives, but the BRE needs to acknowledge that the FSA, like other regulators, will always put its statutory objectives before the regulatory reform agenda if consumer protection is put at risk. The FSA Chief Executive made this a public commitment at the FSA Board meeting in September 2006 to help maintain the excellent trust consumers have in the Agency.

  16.  Since 2006 the BRE's prime focus has been the FSA's delivery of its 25% administrative burden reduction target. The FSA is concerned that focusing rigidly on this numerical target may at times be at the expense of addressing the real concerns of business. It is for this reason that the FSA initiated its own reviews of guidance and forms it asks businesses to complete. The FSA believes that the perception of food businesses about the burden of regulation will improve if it tackles those issues which irritate them most.

  17.  The FSA has a challenging task meeting its 25% administrative burden reduction target. Over 97% of the FSA's total administrative costs can be attributed to information obligations that result from EU legislation. In only about half of these does the UK have any discretion in how they are implemented. The FSA always takes advantage of any flexibility allowed in EU legislation and aims to negotiate flexibility into EU legislation where it may not have at first existed.

  18.  A good example is the flexibility the FSA negotiated into the EU food hygiene legislation. This enabled the FSA, when implementing the regulations, to develop tools to assist small food businesses comply with the legislation in the least burdensome and costly way. The EU legislation resulted in increased costs for all businesses, but the FSA managed to reduce this burden significantly through its Safer Food Better Business (SFBB) initiative. The FSA believes that the SFBB initiative reduced the cost of the legislation for small caterers and food retailers from £1.04 per business, per day to an estimated 43p per business, per day—this represents a saving for every food business of some £224 per year, or 60% of the original cost. With nearly ½ million small food businesses in the UK the savings are considerable. Conversely the costs would have been great if the FSA had not negotiated flexibility into the original legislation.

  19.  Since the FSA administrative burden baseline was set in May 2005, the introduction of the European food legislation and parallel legislation for feed has seen the FSA's administrative burden rise to approximately £205 million (from £91 million in 2005). To achieve its 25% reduction target the FSA will now need to find £136 million of administrative burden savings (up from £11.9 million). This is clearly a considerable challenge and one on which the FSA is focusing much effort. The FSA will have a clearer idea in 2009 of whether it can deliver the target.

  20.  The FSA plays an active role in working with the European Commission to tackle the administrative burdens which result from EU legislation. The FSA would welcome the BRE devoting greater efforts and resources to this area.

Does the BRE work effectively with other parts of Government to deliver regulatory reform?

  21.  Policy is best delivered through proper planning and the involvement of all interested parties. The FSA understands that the BRE's work will often be reactive and that Departments and regulators are only brought in late in the process with short deadlines being set for responses to inter-Departmental consultations. However, the BRE should make sure such occasions are kept to a minimum.

  22.  The FSA is (nearly) unique in being both a non-Ministerial Government Department, and an independent regulator. Our status means that there have been occasions when correspondence has either not reached the FSA or arrived very late. This can hamper the FSA's ability to input fully into any discussions. The BRE could address this issue.

  23.  Since autumn 2006 the FSA, as a Government Department, participated in two assessments of its better regulation work, first by the BRE, and then as an independent regulator in a Hampton Implementation Review. These were in addition to the annual Simplification Plan. This level of monitoring is very resource intensive for a relatively small organization and can detract from the FSA delivering on the regulatory reform agenda overall.

  24.  Whilst the BRE has excused the FSA from a further assessment in the first half of 2008, because of the recent Hampton Implementation Review, they may resume in late 2008 at the same time as the FSA will have to report on the recommendations made in our Hampton Implementation Review report and publish a further Simplification Plan. The BRE should consider the principle of proportionality in its performance monitoring processes.

  25.  Although the BRE is no longer part of the Cabinet Office where its co-ordinating role across Government was clear, it can still perform a useful role in leading and promoting some joined-up initiatives, such as data-sharing and regulatory budgets, announced in the 2008 Budget. Through close and efficient working with others the BRE should be able to deliver such initiatives effectively.

Is the approach to measuring and reporting on performance and outcomes sufficiently robust?

  26.  The FSA believes that the BRE's approach to measuring and reporting on performance and outcomes is sufficiently robust, although the approach could at times be better co-ordinated. As previously mentioned the cumulative effect of providing information for assessments, Hampton Implementation Reviews and follow-up, and Simplification Plans can hinder both the BRE and departments in delivering on the regulatory reform agenda.

Is the current approach to regulatory reform delivering genuine results?

  27.  The FSA would suggest that the cross-Government approach adopted by the BRE, combined with initiatives the Agency has started itself, are delivering genuine results.

  28.  In 2007 the FSA carried out a Sector Specific Review looking at the burden of regulation on butchers and craft bakers. The outcomes of the review will deliver real benefits for these businesses whilst still delivering high levels of protection for consumers. The FSA believes that the most effective approach to delivering regulatory reform is to tackle those issues which cause businesses the most irritation. These may not always be the most administratively burdensome, but if tackled they will gain us greater business recognition and improve business's perception of us as a competent regulator.

  29.  The FSA believes that a sophisticated approach to regulation is required. The administrative burden reduction exercise is a theoretical one. It will certainly deliver headline savings, but will it make a real difference? Similarly a threshold approach to regulation will be flawed. In the UK food produced in establishments employing fewer than 10 employees was responsible for at least 60% of the outbreaks of foodborne disease over the period of January 2000 to March 2005. Regulation must be risk-based and solutions targeted to where the risks occur. And those solutions should be simple, such as the FSA's Safer Food Better Business initiative, or harness IT technology, such as the FSA's Guidance and Regulatory Advice on Imports Legislation GRAIL) database.

Food Standards Agency

April 2008

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