Memorandum submitted by the Food Standards
Agency
EXECUTIVE SUMMARY
— 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
INTRODUCTION: THE
ROLE OF
THE FOOD
STANDARDS AGENCY
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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