Memorandum submitted by the Department
for Business, Enterprise and Regulatory Reform
1. EXECUTIVE
SUMMARY
1.1 Effective and well-focused regulation
can play a vital role in correcting market failures, promoting
fairness and increasing competition. Society expects the Government
to provide protection for the general public, consumers and employees
consistent with the best international standards.
1.2 However, inefficient regulation can
impose significant burdens on the private, public and third sectors,
and this affects our national competitiveness and the quality
of public services. The Government's regulatory reform agenda
is therefore focused on delivering better regulatory outcomes
while driving down unnecessary burdens. This is achieved by:
— reducing the burdens of existing
regulations;
— achieving effective new regulations;
— ensuring inspection and enforcement
is proportionate and risk-based;
— improving transparency and communication
of regulatory changes; and
— working with the European Commission,
European Parliament and other Member States to address the quality
of the stock and the flow of European legislation.
1.3 Significant progress has been made across
all these areas. The Government's ambitious and wide-ranging regulatory
reform agenda is one of the most respected programmes in the world,
confirmed by international surveys. Major regulatory improvements
include:
— Committing to reducing administrative
burdens on the private and third sectors by a net 25% by 2010.
Simplification plans published in December 2007 show that Government
departments have identified annual savings of £3.5 billion
by 2010, with £800 million of savings already delivered.
Actions that will make a real difference to business and charities
on the ground include the removal of the need for private companies
to hold an AGM, a faster process for planning consents, and a
halving of the number of health and safety forms employers have
to complete.
— To address complaints from front-line
public sector workers that too much of their time is spent on
paperwork and bureaucracy, the Government has committed to a 30%
net reduction in the number of data requests made by central Government
to the front-line. Freeing up time that is currently spent on
unnecessary bureaucracy will mean NHS nurses and doctors have
more time to care for patients, police officers have more time
to deal with crime, local authorities can focus on improving local
communities, and teachers on teaching children.
— Introducing a new form of Impact
Assessment from May 2007 which makes estimates of the costs and
benefits of new regulations a much more transparent and evidence-based
part of the policy making process. The new process also includes
more explicit emphasis on post-implementation review.
— Working with regulators and local
authorities to ensure regulations are enforced in a risk-based,
consistent and proportionate manner. For example, the Regulatory
Enforcement and Sanctions (RES) Bill will, subject to Parliamentary
approval, establish the Local Better Regulation Office as a statutory
body, give it powers to promote consistency of regulation at local
level, create a modern system of administrative sanctions for
regulatory non-compliance and create a power for Ministers to
place a duty on regulators to review the burdens they impose and
remove any that are deemed unnecessary.
— Introducing a web-portal (betterregulation.gov.uk)
where businesses and other stakeholders can submit suggestions
for simplifying regulations. The suggestions are published along
with departmental responses.
— Producing for the first time simple,
easy to understand guidance with the help of business to support
the changes coming in on the 1 October 2007 Common Commencement
Date.
— Working with other like-minded countries,
the UK has made a significant contribution to achieving a series
of recent EU better regulation commitments, one of which is an
agreement to cut EU administrative burdens by 25% by 2012.
1.4 The Government is clear that despite
the considerable progress on regulatory reform, much more still
needs to be done, including meeting our commitments to deliver
a 25% reduction in administrative burdens both at UK and EU level
and reducing public sector data burdens by 30%. The Government
will continue, year-by-year, to review regulation and to report
transparently on its progress. And it is committed to continuing
to listen to business, charities, consumers and frontline staff
in the public sector, to understand their priorities for regulatory
reform.
1.5 Currently further reforms are proposed
in the following areas in 2008:
— Following public feedback about how
to improve the consultation of new policy proposals, the Government
will develop a revised Code of Practice for consultation to improve
engagement and achieve better outcomes from consultation, ie more
effective policies.
— To improve transparency, the Government
has committed to publishing the annual total costs and benefits
of new regulations based on the cost benefit analyses in impact
assessments from April 2008. The UK Government is one of the first
in the world to commit to this.
— Responding to feedback from those
being regulated, the government intends to publish a code of practice
to improve the quality and timeliness of guidance.
— To explore possibilities for further
simplification whilst maintaining or improving regulatory outcomes,
the Government is conducting two reviews—a health and safety
review and a review of consumer law, to report in 2008.
1.6 The Government also recognises that
it is vital that impacts of regulatory reforms are communicated
effectively to businesses and other stakeholders so that they
understand and take full advantage of the benefits of reforms.
This will be a priority for Government in 2008 and beyond.
2. INITIATIVES
UNDERWAY
— The Government's regulatory reform
agenda is focused on delivering better regulatory outcomes while
driving down unnecessary burdens. This is achieved by:
— reducing the burdens of existing
regulations;
— achieving effective new regulations;
— ensuring inspection and enforcement
is proportionate and risk-based;
— improving transparency and communication
of regulatory changes; and
— working with the European Commission,
European Parliament and other Member States to address the quality
of the stock and the flow of European legislation.
— This section highlights some of the
main achievements to date in each of the above areas.
2.1 Reducing the burdens of existing regulations
PRIVATE SECTOR
Administrative Burden Reductions Programme
2.1.1 Administrative burdens are costs incurred
by business and the third sector in complying with information
obligations arising from regulation, eg filling in forms, dealing
with inspections, and providing information to third parties such
as consumers. Administrative burdens are only part of the total
costs of regulation, but they are costs that can often be streamlined
without impacting on regulatory outcomes. (They are not the policy
costs of complying with regulations, such as paying licence fees
or purchasing new equipment.
2.1.2 Following on from the Government's
response[1]
to the Better Regulation Task Force's report, "Less is More—Reducing
Burdens, Improving Outcomes",[2]
the administrative burden of complying with Government regulation
was measured using the Standard Cost Model methodology to establish
a "baseline" figure as of May 2005.
2.1.3 In autumn 2006, Government departments
announced their agreement to cutting by a net 25% the £13.4
billion of annual administrative burdens on the private and third
sectors by 2010.
2.1.4 To show how this 25% net saving in
administrative burdens would be achieved in the years to 2010,
departments also agreed to publish annual rolling simplification
plans, the first of which were published in December 2006.
2.1.5 In December 2007, 19 simplification
plans were published, showing more than 700 initiatives to reduce
administrative and other burdens. Across Government savings in
annual administrative burdens of £3.5 billion have been identified
that will be delivered by 2010 (this is 26% of the May 2005 baseline
of £13.4 billion). Of this, over £800 million of annual
net administrative burdens have already been delivered.
Example of administrative burden reductions delivered
to date
— Weights and Measures (Packaged Goods)
Regulations 1986 (DIUS)
— Consolidates 5 sets of regulations
into 1, creating a far simpler regime and greater freedom over
the measuring equipment used in a number of sectors—primarily
food. Reduces information obligations as a result, saving £119
million per year.
— New Competent Persons Scheme for
Electrical Work (Communities)
— 1.2 million pieces of electrical
work a year are now certified by "competent persons",
rather than having to go through building control inspection,
saving around £110 per check. £65 million annual administrative
savings delivered so far.
— Revision of passenger rail franchise
map reducing number of franchises (DfT)
— 25 passenger franchises reduced to
19, saving train operators both time and money in the bidding
process competing against others for different franchises. Estimated
administrative savings of £32.7 million per year for the
rail industry.
— Consolidation of asbestos regulations
(HSE)
— Companies working with textured decorative
coatings—common in domestic premises—no longer need
to have an asbestos licence. £28 million annual administrative
savings delivered.
— Improve pension regulations to make
payments by employers less prescriptive (DWP)
— Legislation has been amended to make
the need for pension scheme trustees to make reports to the Pensions
Regulator less prescriptive. Fewer reports are now filed resulting
in benefits for both trustees and the Regulator. Annual net savings
of £8 million.
— Online vehicle licensing (DfT)
— All car owners can now license their
cars online or on the telephone, saving time, effort and queuing.
DfT analysts predict an administrative saving to business of £13.9
million per year. In addition, if the take-up predicted by the
DVLA is accurate, time savings for private motorists may equate
to some £20 million per year.
— Production of UK guidance notes for
Reg EC 178/2002 Traceability (FoodSA)
— Clearer, simpler, more appropriate
guidance for UK businesses. Removal of specific EC best practice
recommendations. Annual administrative savings of £15.6 million.
— BROMI company "name changes"
(DH)
— Better Regulation of Medicines Initiative:
simplifying the process for changing the name of the owner of
a product (eg when pharmaceutical companies merge). The Association
of British Pharmaceutical Industries estimate £12 million
administrative burden saving.
— Removing requirement for landlords
to provide information for backdating housing benefit claims (DWP)
— In certain cases Landlords are no
longer required to provide information for the backdating of housing
benefit claims in the case of refugees (instead, customers can
now apply for a repayable loan) delivering annual administrative
savings of £11 million.
Legislative Reform Orders and the Legislative and
Regulatory Reform Act 2006
2.1.6 In January 2007, the Legislative and
Regulatory Reform Act 2006 (LRRA) came into force. This repealed
the Regulatory Reform Act 2001 and gives the Government the power
to amend primary legislation by "Legislative Reform Order"
(LRO). The new order-making powers are focussed on better regulation
outcomes and address many of the limitations of Regulatory Reform
Orders under the Regulatory Reform Act.
2.1.7 The first LRO was laid in Parliament
by Communities and Local Government in July to simplify requirements
for local authority consent regimes. Some 20 further LROs are
in development.
2.1.8 Legislative Reform Orders provide
a way of cutting red tape when burdens are imposed by primary
legislation, but as the many examples in simplification plans
demonstrate much can be done by changing secondary legislation,
by administrative changes (eg by reducing the numbers of forms
required), or by producing better guidance to explain legislative
requirements.
THIRD SECTOR
(CHARITIES AND
VOLUNTARY ORGANISATIONS)
2.1.9 Charities and voluntary organisations
rely on high levels of public trust and confidence, and the Government
seeks to strike a balance between the need to minimise burdens
while preserving sufficient levels of accountability and transparency
in the sector.
2.1.10 Regulations affect third sector organisations
in the same way as public or private sector organisations and
many of the examples outlined under the private section will also
deliver benefits to organisations working in the third sector.
For example many organisations in the sector are employers, and
will therefore benefit from the HSE's drive to reduce the costs
of risk assessment, and BERR's project to provide straightforward
guidance on employment law.
2.1.11 In addition, the Government is committed
to applying the principles of good regulation to the way that
funding is administered—ensuring that any burdens are proportionate
and kept to the minimum necessary.
2.1.12 Together with the Office of the Third
Sector, the Better Regulation Executive will publish a document
which will summarise progress in delivering regulatory improvements
for the sector. However, steady progress has been made and reported
in departmental simplification plans.
Examples of delivery to date
— Simplifying legal form or status
— 65,000 charities are already benefiting
from a simplified annual return form, and many more are benefiting
from changes to the registration and audit thresholds as well
as enhanced online services which make it easier to change details
and submit reports and accounts.
— Simplifying charity mergers
— The Charity Commission and Office
of the Third Sector simplification plans contain full details
of measures that will reduce the admin burdens of this type of
legislation by at least 25% by 2010. Some of these measures, including
proposals to save £4.6 million by 2010 by increasing the
threshold for when a charity needs to prepare a Trustee's Annual
Report, have today been published for public consultation in "Financial
Thresholds in the Charities Acts—proposals for change".
— Simplifying other regulations
— Many charities are also employers
and will therefore benefit from the HSE's drive to reduce the
costs of risk assessment, and BERR's project to provide straightforward
guidance on employment law.
— Third sector organisations can also
face particular regulatory issues due to the nature of their work
for instance Criminal Records Checks (CRB).
— The Home Office has continued to
improve and refine its systems for CRB, processes and guidance
for when organisations working with children or vulnerable adults
may need to conduct criminal record bureau checks on staff, trustees
and volunteers. This is evidenced by an almost 90% customer satisfaction.
— Third sector providers have benefited
in recent years from improvements to funding and procurement processes,
such as the Learning and Skills Council's e-tendering process,
and many more will benefit from the Department of Health's introduction
of a generic contract for the provision of out-of-hospital services
in 2008. The Office of the Third Sector are also funding further
research into the scale of this sort of bureaucratic burden on
charities, which will provide a basis for further action.
PUBLIC SECTOR
2.1.13 Government's public sector strategy
`Cutting Bureaucracy for our Public Services' was published on
26 June 2007 to address complaints from front-line workers that
too much of their time is spent on paperwork and bureaucracy.
The key strands of the strategy are:
— A 30% net reduction in the number
of data requests made by central Government to the front-line.
— A voice for front-line workers.
— A reduction in the stock of unnecessary
bureaucracy in the areas the front-line cares most about.
— Success that is understood and mirrored
through the delivery chain.
2.1.14 This programme will provide a step
change in the approach to better regulation in the public services.
Freeing up time that is currently spent on unnecessary bureaucracy
will mean more time for NHS nurses and doctors to care for patients,
police officers to deal with crime, local authorities to improve
local communities and teachers to teach children.
2.1.15 The front-line complains that it
has to spend too long collecting information to provide to central
government. To tackle this issue each department has compiled
a list of the data it requires public sector organisations to
provide. This means that for the first time central government
has a complete picture of the information it is asking the front-line
to provide, better enabling the control and improvement of information
requests. In particular these lists of data requirements can be
reviewed for continuing relevance, and for any overlaps that could
be eliminated. The list of each department's data requirements
is published along with its 2007 Simplification Plan. Front-line
workers can review these lists and put forward their own ideas
for simplifying the data requests that they receive. After verification
by external stakeholder groups a total of around 900 data burdens
have been identified and departments are now seeking to reduce
this number by 30%.
2.1.16 Departments have also been working
with front-line bodies to identify those bureaucratic burdens
that are felt to be most irritating. These may not be the most
costly measures, but they are those that the front-line has indicated
should be addressed to remove or rectify unnecessary burdens.
The major irritants that have been identified are listed in departmental
simplification plans, along with proposals for how they will be
mitigated. The Better Regulation website has been updated so that
any front-line worker can put forward suggestions for simplifying
bureaucracy directly to the department responsible.
2.1.17 The Government is also introducing
legislation to reduce the number of public service inspectorates,
and is committed to reducing inspectorate expenditure by around
a third during 2008 as overall inspectorate activity is reformed,
rationalised and ultimately reduced. Departments have worked together
to develop a clear responsibility on the inspectorates to consult
each other, and manage the cumulative burden of multiple inspections
which fall upon bodies in their areas of responsibility. This
responsibility is set out in the gatekeeper provisions which are
being included in the new inspectorates' establishing legislation.
Examples of delivery to date
— Over 50,000 hours of NHS staff time
(or £1.4 million) have been saved thanks to a review of central
data collections known as ROCR (Review of Central Returns). In
2006-07 10 collections were discontinued. In addition 100,000
hours have been cut from proposed data collections before they
reach the NHS.
— OFSTED inspections (DCSF)
— Since 2006 the average length of
a school inspection has been cut from five to two days. The notice
period has also been reduced from 10 weeks to 2 days. This has
resulted in schools and teachers spending less time on administering
inspections and reduced unnecessary preparation.
— Safer and Stronger Communities Fund
(CLG)
— Local Authorities now have more flexibility
on how they spend money to benefit local communities. The Safer
and Stronger Communities Fund merges several funding streams from
two Government departments into one single fund. Local Authorities
can now combine separate programmes to renew the poorest neighbourhoods
and build safer communities. This allows for a more coordinated
approach as well as reducing the administrative work associated
with managing separate funds.
— County Courts Data Review (MoJ)
— A total of 380 hours per year have
been saved for frontline staff following a review of data collected
from County Courts.
— Police officers will continue to
see improvements in their daily activities with £50 million
being spent on the rollout of new technologies. This includes
video identification, new generation radios, automated number
plate reading, electronic fingerprinting, a computerised missing
persons system, and over 10,000 hi-tech hand hand-held data devices
which will save officers an average of 54 minutes per day.
2.2. Achieving effective new regulations
THE IMPACT
ASSESSMENT PROCESS
2.2.1 On 2 April 2007 the Government announced
the introduction of a new Impact Assessment (IA) process. The
process is aimed at improving the flow of new regulation through
embedding IA at the heart of policy-making, improving the quality
of economic and other analysis underpinning policy-making and
increasing transparency.
2.2.2 Key changes include:
— A revised template aimed at improving
clarity and transparency of IAs. This includes new requirements
to more clearly summarise the rationale for government intervention
and the evidence supporting the proposals.
— A strengthened Ministerial declaration
that will bolster the quality of the analysis in IAs and help
embed this earlier in the policy making process.
— An increased emphasis on post-implementation
review—the need for this existing requirement is featured
on the front page of the new IA template.
2.2.3 The new process was been phased in—IAs
in the new format appeared in public consultations from mid-May
2007 and, from 6 November 2007 it became a requirement for all
IAs will use the new format. The Government is now developing
a new area on the internet where summaries of all published Impact
Assessments will be available, together with links to Impact Assessments
on departmental websites.
2.3 Ensuring inspection and enforcement is
proportionate and risk-based and improving the performance of
regulators
HAMPTON REVIEW
2.3.1 Philip Hampton's report "Reducing
administrative burdens: effective inspection and enforcement"
in March 2005 and considered how to reduce administrative burdens
on business without compromising the UK's excellent regulatory
outcomes.
2.3.2 The review found there was much good
practice in UK regulation, but also that the system, as a whole,
was complicated and good practice was not uniform. Overlaps in
regulators' activities meant there were too many forms, too many
duplicate information requests and multiple inspections imposed
on businesses. The Government is implementing the recommendation
of the Hampton Review in the following ways:
— The Legislative and Regulatory Reform
Act 2006 (the "LRRA") is a key tool for taking this
agenda forward. For instance Section 21 of the LRRA set out and
provides for a duty to have regard to the Better Regulation Commission's
five Principles of Good Regulation (the "Principles").
These principles are that regulatory activities should be carried
out in a way which is transparent, accountable, proportionate
and consistent, and should be targeted only at cases in which
action is needed. The LRRA also provided a Minister of the Crown
with a power to issue a Code of Practice in relation to the exercise
of regulatory functions (Section 22).
— Following parliamentary approval
(given on 27 November 2007), the Regulators' Compliance Code
was issued on 17 December 2007 and an Order then made giving
effect to the duties to have regard to both the Principles and
the Code from 6 April 2008. The Order (SI 2007/3544) applies the
legal duties under section 21 and 22 to certain regulators, such
as the HSE and Environment Agency.
— The Code, for both national and local
regulators, together with the five Principles 7make it legally
binding that regulators covered by the Order ensure inspection
and enforcement is efficient, both for the regulators themselves
and those they regulate. The aim is to ensure that, for the majority
of business it will be easier and less burdensome to comply with
legislation. These new duties should mean that regulators increasingly
target their inspection and enforcement resources at those who
actually pose greater risk of harm: protecting consumers, workers,
the environment etc.
— The Government is overseeing a major
programme, already partly completed, to merge regulators and inspectorates
in both the private and public sectors to ensure inspections do
not impose overlapping burdens.
— The Regulatory Enforcement and Sanctions
Bill was introduced to Parliament in November 2007, and if passed,
will modernise the penalty regimes which regulators use by giving
them access to flexible, efficient and proportionate set of administrative
sanctions.
— If passed, this Bill will also put
on a statutory footing the Local Better Regulation Office set
up in September 2007 to address businesses' request for clear
and consistent inspection and enforcement across all local authorities.
This body focuses on reducing burdens on business by ensuring
local inspection is proportionate and targeted. It will also support
the capacity of local authority regulators to deliver their services
more effectively.
"Ensuring a clear and consistently fair
system across all local authorities is a `must have' for the small
business sector. Adding on the anticipated reduction in costs
to businesses means that this is a positive development and we
welcome the creation of this new body".
John Walker, National Policy Chairman of the
Federation of Small Businesses.
REVIEW OF
INDEPENDENT REGULATORS
2.3.3 To assess how regulators are performing
in line with the Hampton principles and delivering proportionate
enforcement to ensure compliance, the Better Regulation Executive
has worked with the National Audit Office and regulators to develop
a review framework published in May 2007. Five major regulators
have been reviewed—the Health and Safety Executive, Food
Standards Agency, Financial Services Authority, the Environment
Agency and the Office of Fair Trading. Reports on each of the
regulators will be published in February 2008.
PRIORITIES FOR
LOCAL AUTHORITIES
2.3.4 Local government has been calling
for central government to prioritise its expectations of what
local regulatory services should focus on and deliver for years,
but silo thinking and special interest pleading have prevented
Whitehall making progress in this area.
2.3.5 The recommendations following the
Rogers Review on national enforcement priorities for local authority
regulatory services were accepted in full at Budget 2007. This
has meant that for the first time local authorities have clarity
about what central government's main priorities are for local
regulatory services. The five main national enforcement priorities
are:
— alcohol, entertainment and late night
refreshment licensing and its enforcement;
— hygiene of food businesses;
— improving health in the workplace;
— an additional time-limited priority
of animal and public health.
2.3.6 The Better Regulation Executive has
been working closely with major stakeholders including the Chartered
Institute of Environmental Health (CIEH), Trading Standards Institute
(TSI), Local Government Association (LGA) and Local Authorities
Coordinators of Regulatory Services (LACORS) to disseminate information
about these priorities to local authorities and those responsible
for enforcement activity.
2.3.7 To ensure that these priorities are
embedded, the new performance framework for local authorities
and local authority partnerships, published by CLG in October
2007, includes indicators on all of the National Enforcement Priorities
of Central Government, as well as a dedicated indicator to measure
business satisfaction with local regulatory services (NI 182).
This indicator will measure whether businesses feel that they
have been treated fairly by regulatory services, and whether they
feel that the contact that they had was helpful. The results will
allow local government to demonstrate that they are contributing
towards a business friendly environment, at the same time as achieving
excellent regulatory outcomes.
RETAIL ENFORCEMENT
PILOT
2.3.8 The Retail Enforcement Pilot (REP)
is evaluating new ways of risk bases working for local authority
officers from Food Safety, Health and Safety, Trading Standards,
Licensing and Fire Safety services. Through sharing of data and
joint working these officers are able to conduct fewer inspections,
reducing the administrative burden on lower risk businesses.
2.3.9 It means compliant businesses will
have fewer inspections, saving them time and money. It frees up
time for low-risk retail businesses to get on with running their
businesses, and for regulators to focus on illegal traders and
poor performing businesses.
2.3.10 Steady progress is being made with:
— 10 local authorities are now live
with REP and several more are intending to launch this year.
— More than 20 local authorities have
declared themselves ready to invest in and establish project management
so they can engage fully with REP.
— Supplier evaluation to establish
which suppliers are capable of going live by late Spring 2008
is now complete, which will enable local authorities to carry
out their own local competitive procurement.
— Research and further development
work is underway includes workshops to refine REP visits checklist
used by officers, provide coaching o reduce the time it takes
to complete the checklists and to develop data sharing standards
across local authorities.
2.4 Improving transparency and communication
of regulatory changes
COMMON COMMENCEMENT
DATES
2.4.1 To reduce the burden of changing regulations
for business, the majority of changes affecting business come
into force on two dates (Common Commencement Dates).
2.4.2 This October, for the first time,
simple, easy to understand guidance was produced with the help
of business to support the changes coming in on the Common Commencement
Date. This highlighted the most important changes and provided
links to more detailed guidance. In future, we will consider direct
postal or email channels as a way of reaching further businesses.
THE WWW.BETTERREGULATION.GOV.UK
WEBSITE
2.4.3 Over the last year, the Government
has also improved the website that allows anyone to suggest specific
regulatory changes. Three examples from the 2007 simplification
plans which were suggested via the website are:
— Publication on the HSE website of
a full list of all health and safety regulations to benefit all
sectors and in particular SMEs by delivering a quick and simple
route to locate health and safety regulations and requirements
for businesses. Since it went live in October it has had 22,000
hits a month and has been welcomed by business.
— HSE's "core criteria" measure.
The construction industry is benefiting from the restructure,
simplification and clarification of sector-specific regulations.
Companies are now assessed on specific criteria and no longer
need to undertake multiple assessments, saving small electrical
contractors £17,000 in costs annually.
2.5 Better Regulation in Europe
2.5.1 The Government is not limiting its
better regulation work to the national level. To ensure European
Union rules contribute to the UK's competitiveness in a globalised
economy, we have put strong political efforts into reforming EU
laws which generate unnecessary administrative costs. Together
with other like-minded countries, the UK has made a significant
contribution to achieving a series of recent EU better regulation
commitments, one of which is an agreement to cut EU administrative
burdens by 25% by 2012.
2.5.2 The European Commission coordinating
this work has already identified 40 EU laws that should generate
significant savings. These range from simplifying the payments
systems under the common agricultural policy, to reforming social
legislation for European road transport. We estimate that in the
UK these two measures alone could generate £110 million of
administrative costs for farmers and £145 million for road
hauliers respectively.
2.5.3 The Government will continue to play
a leading role in delivering these ambitious savings over the
next few years.
2.5.4 The Government is also committed to
ensuring that agreed EU legislation is implemented in the best
way. Following Lord Davidson's Review in 2006, the Government
launched new guidance in September 2007 to ensure that EU legislation
is implemented in the UK in a way that fulfils our legal obligations,
while avoiding unnecessary burdens which can place UK companies
at a competitive disadvantage. 2007 simplification plans show
how departments are delivering the Davidson Review's specific
recommendations for reducing burdens in the stock of existing
legislation originating from the EU.
3. BETTER REGULATION
EXECUTIVE BUDGET
3.1 Operational Costs
3.1.1 The Better Regulation Executive has
a headcount of 89 and a total budget for 2007-08 of £10.598
million. This includes £1.5 million for the delivery of the
Retail Enforcement Pilot and £2.7 million for the establishment
of the Local Better Regulation Office. The remaining £6.398
million is split across the Better Regulation Executive's objectives
which are:
— reducing the burdens of existing
regulations;
— achieving effective new regulations;
— ensuring inspection and enforcement
is proportionate and risk-based;
— improving transparency and communication
of regulatory changes; and
— working with the European Commission,
European Parliament and other Member States to address the quality
of the stock and the flow of European legislation.
3.2 Administrative Burdens Measurement Exercise
3.2.1 Following a procurement exercise carried
out under the OGC Suppliers Catalogue (S-Cat) framework, PricewaterhouseCoopers
(PwC) were selected to measure the administrative burdens imposed
by regulations actively enforced in May 2005 on businesses, charities
and the voluntary sector using the Standard Cost Model (SCM)[3]
on behalf of Government. Contracts, between each department and
PwC, were tendered on a fixed price basis dependent upon the total
number of regulations measured.
3.3 Other Stakeholders
3.3.1 Departmental Better Regulation Units
play a coordinating role within their respective departments for
the regulations they produce, and their size and budget varies
depending on the regulatory responsibilities of departments and
departmental procedures for policy making. But it should be noted
that it is policy makers who are primarily responsible for embedding
better regulation principles in the day to day activities of policy
making. For example effective consultation and high quality Impact
Assessments are integral to good policy making.
3.3.2 Details of their current budget and
the resources available to them for some of the departments have
been provided below (these exclude details for economic or analytical
support who often have split responsibilities):
| Department | 2007-08 Budget
| No of Staff |
| BERR | £600k | 8
|
| DCLG | N/A | 3
|
| DCMS | £118k | 2.5
|
| DEFRA | N/A | 18
|
| DCSF/DIUS | N/A | 3
|
| DWP | N/A | 3
|
| FCO | N/A | 0.5
|
| Forestry Commission | £6k
| 2 |
| FSA | £350k | 5
|
| Home Office | N/A | 2.5
|
| HSE | N/A | 5
|
| MOD | N/A | 0.5
|
| | |
4. PERFORMANCE MONITORING
AND EVALUATION
4.1 Current BERR SR04 Public Service Agreement (PSA)
4.1.1 SR04 PSA 2 Better Regulation states:
— "By April 2008, ensure that departments deliver
better regulation and tackle unnecessary bureaucracy in both the
public and private sectors through:
(i) reducing the overall administrative burden;
(ii) maintaining the UK's international standing on better
regulation; and
(iii) improving [business] perception of regulation".
4.1.2 BERRs Autumn Performance Report outlines progress
towards our Public Service Agreement (PSA) targets which cover
the period 2005 to 2008 and is an important tool for achieving
accountability and transparency.
(i) Reducing the overall Administrative Burden
4.1.3 The Government wide administrative burden at May
2005 was approximately £13.4 billion. The UK Government is
in the middle of an ambitious programme to reduce administrative
burdens on business and charities by a net 25% by 2010.
4.1.4 Departments have published their second Simplification
Plans last year,[4] which
show strong progress on delivering both the net administrative
burdens target by 2010 and in delivering regulatory savings to
the UK economy as a whole. Government identified annual net savings
in administrative burdens of £3.5 billion by 2010, (26% of
the May 2005 baseline). Of this, over £800 million of has
already been delivered.
4.1.5 The National Audit Office report to Parliament
annually on the achievements of this programme. As part of its
review, the NAO is conducting an annual survey to track around
2000 businesses' perceptions of the burden of regulation and the
impact of departmental initiatives to reduce burdens (the first
report was published in July 2007 see below).
(ii) Maintaining the UK's International standing on better
regulation
4.1.6 The UK wants to remain well placed in international
comparisons of regulatory burdens and regulatory reform, defined
as remaining within the top 10 internationally and within the
top 3 in the EU based on the following surveys:
— World Bank "Doing Business" survey[5]
(published annually); and
— Organisation for Economic Co-operation and Development
(OECD) Structural Policy Indicators and Priorities for "product
market regulation" and "barriers to entrepreneurship"
(on the basis of surveys carried out in the publication "Going
for Growth"[6]).
4.1.7 The OECD Economic Survey of the United Kingdom
2005[7] ranked the UK top
among the G8 countries and second among all OECD countries for
liberal product market regulation.
4.1.8 The World Bank's study of 178 countries "Doing
Business 2008",[8]
published September 2007, placed the UK second in the EU and sixth
in the world for the best business conditions.
| Economy | Ease of Doing Business Rank (Out of 175)
|
| Singapore | 1 |
| New Zealand | 2 |
| United States | 3 |
| Hong Kong, China | 4 |
| Denmark | 5 |
| United Kingdom | 6 |
| Canada | 7 |
| Ireland | 8 |
| Australia | 9 |
| Iceland | 10 |
| |
4.1.9 The Better Regulation Executive will work with
Departments to analyse any significant changes in the regulatory
regimes in other leading countries thereby ensuring that we can
learn from best practice and maintain the UK's international competitiveness.
(iii) Improving business perception of regulation
4.1.10 The National Audit Office (NAO) has developed
an annual survey on business perception of regulation to evaluate
government efforts in better regulation which involved surveying
around 2,000 businesses.
4.1.11 One element of the survey measured the extent
to which businesses understand the purpose of regulation, the
ease of compliance and the perceived proportionality of the regulations.
It is based on performance against a basket of the 5 policy areas
that were the most important in the administrative burdens exercise—tax
administration, employment law, health and safety law, planning
and company law.
4.1.12 The NAO published the results from the 2007 survey
of business perceptions on 25 July 2007.[9]
4.1.13 The 2007 survey carried out 1,882 interviews.
When asked to comment on the statement "Most regulation is
fair and proportionate" with regards to the appropriate policy
area, the responses were as follows:
— Neither agree nor disagree: 11%
4.1.14 Therefore the baseline of this measurement is
40%. The 95% confidence interval for this indicator is +2% or
-2%.
4.1.15 For example the NAO survey highlights that business
awareness of better regulation initiatives is very low, around
10-12%. Also 85% of businesses are not confident that Government
will not succeed in reducing regulatory burdens on business and
deliver real benefits for them. In the IoD survey of UK businesses
46% found that regulation in the last twelve months was worse
than before and 48% have noticed no change; a mere 1% had noticed
a improvement in the regulatory environment.
4.2 Focus Group Research on the Perceptions of Regulation
4.2.1 The Better Regulation Executive also makes regular
efforts to hear and understand the opinions of business and the
public about regulation in order to inform its work. Much of the
existing knowledge on attitudes towards regulation is anecdotal
or focuses on very specific policy areas. To develop its understanding
in more depth the Better Regulation Executive commissioned Ipsos
MORI to carry out a programme of qualitative research designed
to explore how businesses and the public feel about regulation.
4.2.2 Ipsos MORI conducted 14 focus groups with businesses
(small and large) and 6 groups with the general public in different
locations around the country in 2007. In addition to this a number
of in-depth telephone interviews were conducted with leading business
representatives.
4.2.3 After listening in detail to the opinions of the
general public and business about regulation, the research was
able to provide the Better Regulation Executive with a number
of interesting findings. Although spontaneous reactions to regulation
tended to be negative discussion and information about regulation
prompted more positive views. Both business and citizens could
see tangible benefits to regulation—the creation of a level
playing field for business and providing protection to individuals
where they could not exercise control over the risks they faced.
4.2.4 Furthermore, the research found that there was
a real appetite for information on regulation. People wanted to
know why various regulations are in place. They feel that having
access to this will help them to understand the issues in more
depth and, furthermore, may help to gain their buy-in. However,
there is little evidence to suggest that participants are proactive
in accessing such information. They would prefer to have it provided
to them, rather than it simply being made public in the hope that
they might find it.
4.2.5 Full details of this research can be found at:
http://bre.berr.gov.uk/regulation/reviewing_regulation/perceptions/index.asp
4.3 Independent assessment of Regulatory Impact Assessments
(RIAs) and new Impact Assessments (IAs)
4.3.1 The NAO have reviewed the use of Regulatory Impact
Assessments (RIAs) across Government since 2001.
4.3.2 In the last two years they had a departmental focus—examining
a sample of Impact assessments and considering how departments
have sought to use RIAs in the decision-making process. However,
with the introduction of new Impact Assessment (IA) guidance and
a revised template has meant they have changed the focus of this
year's review to undertake a broader examination of department's
application of RIAs/IAs.
4.3.3 Their 2007-08 review will examine the scrutiny
and quality assurance arrangements that departments are implementing.
5. CONSULTATION AND
CO-ORDINATION
OF REGULATORY
REFORM
5.1 A cross-Government goal, listening to and responding
to those being regulated
5.1.1 The regulatory reform agenda is important across
Government. The role of the Better Regulation Executive is to
support and, where appropriate, challenge departments and regulators
to deliver effective regulations for the private, public and third
sectors.
5.1.2 Each department has a Better Regulation Minister
who is accountable for the wider better regulation agenda within
his or her department. They are supported by Better Regulation
Board Level Champions, whose role is to ensure that board members
are committed to the wider better regulation agenda, provide adequate
resources within their departments to minimise unnecessary burdens,
and liaise with Better Regulation Executive senior management.
In addition, Departments have established Better Regulation Units
(BRU) that are dedicated to supporting policy teams in reducing
administrative burdens and delivering the wider better regulation
agenda. The BRUs act as the liaison point for the Better Regulation
Executive and are the project managers with responsibility for
working with policy teams to identify and implement measures.
5.1.3 The administrative burdens reduction programme,
the drive to reduce data burdens on the public sector front line,
improving inspection and enforcement and other initiatives mentioned
earlier in this memorandum are examples of close working between
the Better Regulation Executive, government departments, regulators
and those being regulated. The Better Regulation Executive considers
it invaluable to use stakeholder feedback to develop, monitor
and improve initiatives. Further examples of cross-Government
working on specific projects and engagement with external stakeholders
are set out below.
5.2 Examples
Consumer information
5.2.1 In November 2007 the Better Regulation Executive
and the National Consumer Council published a report to Government
setting out recommendations to maximise the effectiveness of information
government requires third parties—such as businesses—to
provide to consumers. Government has accepted these recommendations.
5.2.2 The project aimed to benefit both business and
consumers by improving the effectiveness of information, and ensuring
it was only used where it could make a difference. To this end,
the review was conducted jointly with the National Consumer Council.
The review team commissioned a research company to conduct 12
qualitative discussion groups with consumers to fully understand
consumer views and experiences. The team held over 60 interviews
with stakeholders from government bodies, business and NGOs. The
team spoke directly with businesses including Boots, ASDA and
Unilever as well as industry bodies such as the British Toy and
Hobby Association, the Association of British Insurers and CBI.
5.2.3 The findings from this research and discussion
fed into an interim report which was published in July. The report
asked for comments to inform debate and discussion. The responses
the team received were overwhelmingly positive about the thrust
of the report's finding that regulation could be used more effectively
to help consumers take decisions. The team also worked with other
Government departments and presented initial findings to a seminar
of departmental board-level "Better Regulation Champions".
5.2.4 The final report and recommendations built on the
areas for change set out in the interim report. Alongside the
final report, the Better Regulation Executive and National Consumer
Council published a guide for policy-makers across government.
The team are planning a European launch event in earlier 2008
to publicise their findings.
Regulation and Business Advice
5.2.5 Lead by the Better Regulation Executive this project
looked at the reasons behind businesses spending large sums of
money on advice on how to follow regulations. Supported by an
advisory group of business organisations, businesses intermediaries,
and government departments met to discuss the emerging findings
and recommendations.
5.2.6 The project also drew heavily on the findings of
focus groups with businesses. These helped the project to identify
the key reasons behind businesses paying for regulation advice.
These were:
— the volume and complexity of regulation;
— low awareness of government guidance;
— poor quality government guidance; and
— uncertainty, risk and lack of confidence.
5.2.7 Two key findings from the project are being taken
forward. These are:
— Improvements to the communication of regulatory
change:
— The Better Regulation Executive worked with business
focus groups and business organisations to improve the quality
of guidance on regulations and the information provided on Common
Commencement Dates and to develop new ways of communicating the
guidance.
— The guidance issued for common commencement dates
been transformed from 60 pages of information structured by government
department to a single page summary of key changes, supported
by a 1 page summary for each change providing enough information
for the majority of businesses to comply. All of this guidance
is in plain English and easy to understand.
— A code of practice setting out the standards of
guidance businesses can expect from government will be published
in 2008. A consultation document has been developed in conjunction
with an advisory panel of business representatives and departments.
The code itself will build on comments received from stakeholders
during the consultation.
Health and Safety Review
5.2.8 The Better Regulation Executive, with support from
the Health and Safety Executive/Health and Safety Commission,
have initiated a review considering how the health and safety
regime affects small employers and employers whose overall risk
is relatively low. The objectives of this review are to:
— explore from the perspective of low risk businesses
(especially SMEs) how the health and safety regulatory regime
cumulatively impacts on them; what costs and burdens it places
on them, including international comparisons with regimes in other
jurisdictions; what behaviour changes it has driven; what benefits
they and their employees perceive; and what particular difficulties
they face in complying. This should in particular draw out any
practical relationship with linked requirements (for example,
building regulations, environmental, fire and food safety);
— investigate how the health and safety regulatory
regime (including both the regulators and other drivers such as
insurance) deals with new and emerging risks, especially health
risks;
— assess the relative importance of key drivers
of the main costs/burdens (regulatory requirements, regulator
behaviour, insurance demands, business advisers etc); and in the
light of this make recommendations of priority areas for action
to minimise burdens without compromising Health and Safety. These
should take account of any recommendations on regulator behaviour
made by the Hampton Implementation Review of HSE being undertaken
in parallel by Better Regulation Executive/NAO.
5.2.9 Stakeholder input is vital to the success of this
review, ranging from those with an interest in the Health and
Safety system to those with professional involvement or experience
of being regulated or affected by it. Therefore the review is
holding a series of stakeholder events in the English regions
and the devolved administrations.
5.2.10 These have been set up in partnership with colleagues
in Government Offices, Regional Development Agencies and Devolved
Administrations through January 2008.
Consumer Protection Regime
5.2.11 The Better Regulation Executive and Consumer and
Competition Policy areas within BERR are conducting a review of
the consumer protection regime to establish opportunities to simplify
legislation, while continuing to ensure the public get a fair
deal and high quality products. It is also exploring opportunities
to improve enforcement, consumer empowerment and redress.
5.2.12 The team is working closely with consumer groups,
business organisations, academics, NGOs and local and central
government organisations to build current evidence on the functioning
of the consumer protection framework and gather ideas about opportunities
for future reform. They have held 30 stakeholder meetings to date
and recently held a workshop with over 40 stakeholder representatives
including the CBI, Which?, Lloyds TSB, the National Consumer Council
and local authority trading standards. They are currently conducting
a number of visits to local authorities to see how legislation
is working in practice for businesses and Trading Standards.
Review of Consultation
5.2.13 Public engagement, including consultation on policy
development and service design, is an important part of a modern
representative democracy. Consultation is a key stage of engagement
with both public and stakeholder organisations as it ensures decisions
are informed by listening to those who may be affected by new
proposals. Since 2001 the Government has had in place a Code of
Practice to provide officials with a framework for consultation
exercises on policy development. The adoption of a Code proved
particularly popular with stakeholder organisations which regularly
participate in consultations and has also been used as a model
by other public sector bodies around the UK.
5.2.14 Following the criteria of a Code of Practice is,
of course, not an end in itself. The outcomes of consultation
are what really count. In 2007, the Government has sought public
feedback about how to improve the consultation of new policy proposals
to make sure that all sources of expertise are used when policies
are designed. Proposals for reform will be set out in 2008.
Better Regulation Executive Visits Programme
5.2.15 The Better Regulation Executive is also committed
to understanding the regulatory issues that those working in the
private, public and third sectors are facing. To achieve this
the Better Regulation Executive has established the Visits Programme
where staff at all levels throughout the Better Regulation Executive
are encouraged to see first hand how those being regulated are
impacted by regulation and their ideas for change.
www.BetterRegulation.gov.uk Website
5.2.16 The betterregulation.gov.uk website, mentioned
in Section 2.4, is also a very useful mechanism of listening to
and responding to ideas from the front-line.
6. FUTURE STRATEGY
6.1 Responsibility for better regulation was with the
Cabinet Office until the machinery of government changes in June
2007. The Better Regulation Executive remains a cross-Government
unit and continues to hold all those responsible for regulations
impact the private, public and third sectors to account including
wider BERR.
6.2 There has been considerable progress on regulatory
reform, as outlined in earlier chapters. But the Government recognises
that much more still needs to be done, including meeting our commitments
to deliver a 25% reduction in administrative burdens both at UK
and EU level and reducing public sector data burdens by 30%. The
Government will continue, year-by-year, to review regulation and
to report transparently on its progress and is committed to continuing
to listen to business, charities, consumers and frontline staff
in the public sector, to understand their priorities for regulatory
reform.
6.3 Currently further reforms are proposed in the following
areas in 2008 and beyond:
— Following public feedback about how to improve
the consultation of new policy proposals, the Government will
develop a revised Code of Practice on consultation to improve
engagement and achieve better outcomes from consultation, ie more
effective policies.
— To improve transparency, the Government has committed
to publishing the annual total costs and benefits of new regulations
based on the cost benefit analyses in impact assessments from
April 2008. The UK Government is one of the first in the world
to commit to this. This has been included as an indicator in BERRs
new PSA over the CSR 2007 period to deliver the conditions for
business success. The Government commitment to administrative
burdens reductions is also an indicator in this new PSA.
— The Government also has new embedded better regulation
principles in a number of its key Public Service Agreements and
Departmental Strategic Objectives for the 2007 Comprehensive Spending
Review period, covering the period from 2008-11. For instance
the Department for Environment, Food and Rural Affairs (DEFRA)
has a PSA on climate change policy which includes a new indicator
on the cost effectiveness of its policies. This will help the
Government demonstrate that its measures to tackle climate change
are subject to robust cost benefit analysis. BERR also has a department
strategic objective for CSR 2007 period to ensure that all Government
Departments and agencies deliver better regulation for the private,
public and third sector.
— The new national indicator set for local authorities
announced in October 2007 includes an indicator on business satisfaction
with regulatory services (environmental health, trading standards
and licensing), demonstrating the importance the Government attaches
to delivering better regulation at local authority level and complementing
Better Regulation Executive's work at national level. The indicator
has been subject to consultation and the Government is currently
considering the responses.
— Responding to feedback from those being regulated,
the government intends to publish a code of practice to improve
the quality and timeliness of guidance.
— To explore possibilities for further simplification
whilst maintaining or improving regulatory outcomes, the Government
is conducting two reviews—a health and safety review and
a review of consumer law, to report in 2008.
— The Government also recognises that it is vital
that impacts of regulatory reforms are communicated effectively
to businesses and other stakeholders so that they understand and
take full advantage of the benefits of reforms. This will be an
important priority for Government in 2008 and beyond.
1
Government response to the Better Regulation Task Force report
"Less is More" (March 2005): http://www.brc.gov.uk/upload/assets/www.brc.gov.uk/lessismore_response.pdf Back
2
Better Regulation Task Force report "Less is More" (March
2005): http://www.brc.gov.uk/publications/lessismoreentry.aspx Back
3
HMRC undertook a separate but parallel exercise contract KMPG
to undertake the measurement of administrative burdens resulting
from the Tax regime, due to the specific nature of the associated
regulations. Back
4
Please see below for the 2006 Simplification Plans and for further
information (the second Simplification Plans (2007) are not currently
available online): http://bre.berr.gov.uk/regulation/reform/simplifying/plans.asp Back
5
World Bank "Doing Business" Survey: http://www.doingbusiness.org/ Back
6
OECD "Going for Growth 2007": http://www.oecd.org/growth/goingforgrowth2007 Back
7
OECD Economic Survey of the United Kingdom 2005 (October 2005):
http://www.oecd.org/document/43/0,2340,en_2649_201185_35456619_1_1_1_1,00.html Back
8
World Bank http://www.doingbusiness.org/documents/Press_Releases_08/DB_08_Oveview_English.pdf Back
9
NAO survey `Reducing the cost of complying with regulations: The
delivery of the Administrative Burdens Reduction Programme, 2007':
http://www.nao.org.uk/publications/nao_reports/06-07/0607615.pdf Back
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