Examination of Witnesses (Questions 20-39)|
29 JANUARY 2008
Q020. Gordon Banks: But I might not
know what I want to know about.
Mr Sargent: I agree.
Mr Kohli: The way that that might
work is it allows you to effectively describe what kind of organisation
you are and then tell you the information that is of relevance
to you. So I am sure it is not perfect and I am sure that there
is a long way to go and it is certainly an area where government
needs to improve, but it is absolutely trying to provide the kind
of service that you are describing.
Q021. Phil Wilson: A couple of questions
on this 25% figure. What will be the annual savings on that? What
does that equate to in money terms?
Mr Kohli: £3.5 billion.
Q022. Phil Wilson: That is in government?
Mr Kohli: No, for businesses and
third sector organisations.
Q023. Phil Wilson: Government departments
have identified annual savings of £3.5 billion worth of savings
to the department.
Mr Kohli: No, the government departments
are responsible for finding measures which deliver £3.5 billion
of savings for businesses and third sector organisations, which
is what the measurement exercise covers.
Mr Sargent: The government is
obviously saving money itself as a result of it by not collecting
information, but we have not identified it, that is not part of
Q024. Phil Wilson: It was the way
it read; I thought it was the government departments. One other
question. One aspect in the memorandum is to improve transparency
where you are going to publish annual total costs and benefits
of new regulations based on cost benefit analysis from April this
year. So by 2010 that will add up to a 25% cut, is that right?
And every year that you save so much money you get the £3.5
billion? So if in 2010 I look at that and say, "That is where
the savings have been made"?
Mr Kohli: Let me try and explain
the distinctionthat there is a distinction. We are already
committed and have been committed for some time for making the
£3.5 billion savings absolutely transparent. In this document,
of which I hope we have given you a copy or sent you a link, which
was published just before Christmas, sets out all of the initiatives
the government departments are undertaking in order to deliver
the reductions towards their £3.5 billion. This is just a
summary of a series of longer documents written by other departments,
and there is a particular table in here which says, for instance,
that the Department for Culture, Media and Sport has identified
measures which save £108 million out of their £343 million
baseline for instance. So that will be very transparent. And after
May 2010 as a government we should be able to demonstrate to Parliament
and to the business community that we will have delivered the
savings that we are talking about, this £3.5 billion number.
What that line in that memorandum is referring to is something
slightly different, which is that as a government we do not currently
publish the overall cost of new regulations coming in beyond admin
and the overall benefits of new regulations coming in. So for
each individual regulation you can get hold of an impact assessment
which will give you some sense of the costs and benefits and a
much better sense of costs and benefits now than it did a year
or two ago. What we are promising to do is to effectively tot
up the totals of all those new regulations coming inthe
costs and benefitsand to publish a series. The only country
in the world that does something similar to that is the United
States, who do so effectively for secondary legislationthey
do a similar seriesbut they do not do it for all regulations.
So we will be the first country in the world to do that kind of
series, and that is beyond administrative burdens, that is for
the whole of policy costs as well.
John Hemming: On the numbers again, just
looking at the DVLA where you say that there is a £13.9 million
a year saving, my personal experience is that it takes me a lot
more effort now to get a car taxed than it did five years ago.
Judy Mallaber: It takes two minutes.
Q025. Dr Doug Naysmith: Nonsense.
It is the easiest thing in the world to tax your car.
Mr Sargent: It takes 60 seconds
compared to an hour going to the post office.
Q026. John Hemming: The first thing,
is that about regulatory reform? I would argue is it is not. Secondly,
how you quantify those things is an interesting question.
Mr Sargent: The great thing with
that particular example is that it is a very personal experience
and I actually feel that the numbers are underestimated because
if you take all of the businesses and all of the citizens who
have to do that exercise the amount of time they can save is pretty
phenomenal. If you think about the achievement, government very
rarely gets credit for IT projects but that is taking two separate
public sector databases and it is taking a private sector database
live, any time of the day or night, and actually allowing you
to do a transaction. So that is a phenomenal achievement and it
rarely gets credit. But good service is actually better regulation.
The fact that you can do something quicker and with less waste
of time as far as I am concerned is better regulation. So good
service is about better regulation.
Chairman: I am sure your car is taxed,
Q027. Judy Mallaber: Rick Haythornthwaite,
Chairman of the Better Regulation Commission has described the
impact assessment system as "the best leading indicator we
have". So why did you decide to stop doing routine scrutiny
of impact assessments?
Mr Sargent: Impact assessments,
I will make two observations. The manner in which they were being
prepared we felt needed improvement and greater transparency and
a top sheet where Parliamentarians could take that top sheet and
say, "We agree with these numbers or we do not and we can
debate it." So the first thing we did was that we created
a very transparent structure as of May last year for the impact
assessments. The scrutiny of it is something that is done very
much by people either on the receiving end of it or Parliamentarians
or the press, so we do not feel that our job is to sit and look
on a daily basis as to what has happened in that area. People
make sure that they do themwe have managed to achieve pretty
much 100% across the board people doing them nowbut scrutinising
on a daily basis, we feel that other people are better placed
than we are to do that.
Q028. Judy Mallaber: How do you know
it is effective if you are not looking at them?
Mr Kohli: Let me be clear about
what we do and do not do. When William and I arrived into the
Better Regulation Executive we knew that impact assessment or,
as it was then called, the regulatory impact assessment was an
important tool of those in government who believed in better regulation,
and it was important because it was the way to find out what the
cost and benefits associated with a particular policy measure
wereexcept it was not. We looked at themand that
is exactly what we did two and a bit years agowe pulled
out a few of them and we looked at them and we read them and we
thought that actually you cannot find out what the cost and benefits
arethey are all hidden away in complicated tables. And
if we expect Ministers and Parliamentarians and outside stakeholders
to really scrutinise this process then we have to make it simpler
and more accessible because if even we, who are in government
and paid to run this agenda, do not understand it how can we expect
others to understand it? So what we have introduced is effectively
one sheet which brings transparency to the system, so that it
says that the overall costs of this measure are X and it tells
you the net present value. I am assuming that when Rick is referring
to looking to make a positive comment he is referring to the new
system and not the old system. I do not know what date that comment
Q029. Judy Mallaber: January 2006.
Mr Kohli: It is after we had talked
to Rick about the new system and we had gone public and what it
would look like. Let me get my facts right. Certainly when went
to the Better Regulation Commission and said that we intend to
overhaul the way that impact assessment works Rick was enthusiastic
in telling us that this was a good thing and it would bring better
transparency. That said, the UK seemed to be quite good, but we
just did not think it worked. What do we in the BRE do on impact
assessments? Where you have an impact assessment on a major measure
the people in the BRE work very closely with the department to
establish that the impact assessment data is accurate. What we
do not want to do is to take away the responsibility from the
department to get it right themselves. We found a couple of years
ago that if a department was not very good at doing impact assessments
it would give the impact assessments to the BRE and say, "What
do you think?" and the BRE would say that they were not very
good and would offer to rewrite them for them, and I think that
just does not work; it does not give us the kind of culture change
across Whitehall that we need, and what we really need in our
view is pressure on departments where they fail to do it well
and hopefully the new system will allow that to happen.
Q030. Judy Mallaber: So how are you
going to assess whether the new system works if you are not analysing
what is happening within those assessments? And who is it that
is now responsiblerather than the department just monitoring
itself, as it werefor scrutinising those assessments to
make sure that they are accurate?
Mr Sargent: The key dialogue we
have with the department is the tool that we use quite oftenthe
dialogue. So we are engaging specifically as the document is being
created by the department, before it gets made public. Once it
gets made public there is not a lot of opportunity for doing that.
In addition to that the NAO is obviously then taking a view on
the quality of impact assessments, etcetera. But we have a very
strong opinion when we are dealing with departments as to what
we think about the numbers, the quality of what they have done
and that is generally the way we engage.
Q031. Judy Mallaber: So you are saying
that it is up to the NAO but certainly if you are sat on a Committee
it is quite hard to look at an impact assessment and to really
know whether it is right or it is not right or it is going to
turn out to have been inaccurate.
Mr Sargent: With any significant
impact assessment we will have a strong dialogue with that department
and if we felt it was inappropriate and no good we would certainly
challenge them and use our internal processes.
Q032. Judy Mallaber: Following Lorely's
line of questioning, is there any mechanism for reviewing assessments
in their implementation to see whether they turn out to have been
correct? If so, what is that mechanism and what is your role,
if any, in relation to that?
Mr Kohli: The new impact assessment
format has a question in it which says when will the policy be
reviewed to establish the actual costs and benefits and the achievement
of the desired effects. So departments for the first time are
required to say publicly the date on which that will happen. This
format has not been in place very long so we have not yet reached
any of those dates, but as we do so we would expect both the BRE
within government, the department themselves and the stakeholders
affected by regulation to effectively hold a department's feet
to the fire.
Q033. Judy Mallaber: And you would
have a role in making sure that that has happened and that it
is an adequate assessment of the implementation?
Mr Kohli: I think it is fair to
say that we would have a role; I do not think it is fair
to say that we would have the only role. We see this as a partnership
between all the people who are affected by the regulation and
responsible for delivering better regulation.
Q034. Judy Mallaber: So there is
no one overall place that you would say has that responsibility
because the difficulty is often that analysis falls between a
number of different stools and everyone one is expecting everyone
else to report what has happened.
Mr Kohli: We are responsible for
ensuring that the government brings into force regulations where
the benefits justify the cost and regulation is absolutely essential.
If it transpires after a number of years that in a particular
area those assumptions were not true then we are responsible for
those areas. Let me give you an example, which is an easier way
of getting into the issue. A few years ago the former DTI was
concerned about the number of employment disputes that were going
to tribunal and in their view they were going needlessly. Employers
and trade unions both felt that there was a problem that needed
addressing. Therefore, what they invented was an idea that before
a dispute can go to a tribunal employers should be required and
employees should be required to try and settle disputes within
the workplace, which is a good idea. The DTI invented a three-stage
procedure for how these disputes should be resolved and there
was a requirement that employers followed this three-stage procedure.
This process unfortunately did not work. What actually happened
was that the disputes within workplaces became overly formal too
quickly and too many of these cases ended up in court and employers
found themselves having procedural problems with the process they
had followed in the workplace and employees found themselves in
a tribunal situation when they did not want that and what they
actually wanted was some form of informal redressin some
cases all they wanted was for their employer to say sorry. Very
simple human things in the workplace. When we set up the BRE we
spent a lot of time talking to businesses and one of the things
that businesses told us was that this was an area which really
concerned them; they were really worried that on the ground this
was causing more harm than good. So we did some research, we did
some thinking about it, we went to the department and we persuaded
the departmentwe were more or less pushing at an open doorthat
this was not the right way of doing things, and we came up with
a different way of doing things. Indeed, the Employment Bill currently
before Parliament addresses this issue and effectively gets rid
of this very formal requirement and replaces it with an informal
way of approaching it. That is an example of a post-implementation
review where a policy was done in good faith, did not workand
sometimes that happensand the department, encouraged by
us, realised that it did not work and has come up with a different
way of doing things. And it happened to save businesses a lot
of money too and I think personally it will save employees a lot
of aggravation too. So that is an example of where post-implementation
can work, and those examples will continue in the future.
Q035. Judy Mallaber: That is helpful.
In terms of when impact assessments have just been done though
have there been any recent ones that you can recall where the
fact of doing the impact assessment resulted in a draft regulation
being abandoned? Has it had an impact at that stage?
Mr Sargent: I can give you an
example of one where it dramatically changed and made it easier,
which was the extension of the school leaving age from 16 to 17
to 18. That was one of the very early examples of a policy which
used this approach, and the process and the thinking ended up
with significant savings; and when the policy came out, which
you would normally have expected the business world to feel a
bit uncomfortable about it because it very much impacted on the
people being employed in that age group, the business community
was very comfortable with the end result and the policy that was
designed. So the policy was not abandoned but it was in the course
of the process of being designed altered quite a bit and the end
result was government and the business community were in a very
comfortable place together.
Q036. Judy Mallaber: So by doing
the impact assessment they end up with a better policy?
Mr Sargent: Absolutely, and that
is a really powerful example. Unusually, it saves money on both
sides of the fence.
Q037. Judy Mallaber: Is it possible
for you to give us more details of that? I would be very interested
to know more details of that as an example to use?
Mr Sargent: Yes.
Q038. Judy Mallaber: On the question
of departmental simplification plans have you asked for any wholesale
revisions of those or have you been content with those that have
Mr Sargent: The plans are the
responsibility of the department, is the starting point. The way
we are structured is that we have teams that face departments
and so we engage in a dialogue with them. One of the things that
we do in addition to our dialogue with themso it is not
about saying that we think the plan is awful and we want to reject
it because it does not get to that stage because we are in very
early with the dialogue. That is the first observation I would
make. So that was the first thing that happened. The second thing
is that we have encouraged parties to share the draft plan very
early on. I in turn have gone to the business community and said,
"Please do not publicly criticise a draft plan while it is
a draft plan because I am trying to encourage officials and Ministers
to share their thinking about where they are heading at draft
stage and I wanted to give you a draft when it is a very rough
draft where you guys can say, `This is important to us and this
is not and actually we do not believe your numbers there' or `These
numbers are fine.'" So that the department has guidance and
help from outsiders who feel the impact. It is very different
from a plan without the people who are on the receiving end being
part of the process. So I cannot think of an example where the
word wholesale rejection will have happened.
Q039. Judy Mallaber: At what stage
do you see the plans?
Mr Sargent: Very early on.
12 2007 Simplification Plans Summary: http://bre.berr.gov.uk/regulation/documents/simplification/bre-simplification-plans-07.pdf Back