Memorandum submitted by the Department
for Environment, Food and Rural Affairs
EXECUTIVE SUMMARY
Defra welcomes the Regulatory Reform Committee
Inquiry into the Better Regulation Executive (BRE) and the Impact
of the Better Regulation Agenda. The inquiry will help to assess
progress, identify success and inform developments.
Regulatory reform is central to Defra's drive
to improve and modernise the way we identify, develop and deliver
our policies to stakeholders in pursuit of our key high-;level
objectives to tackle dangerous climate change and restore, maintain
and enhance a healthy, resilient natural environment. An essential
part of this is to stimulate real behaviour change and innovation
by reducing non-productive administrative burdens, using market-based
instruments, targeting inspection on high risk operations, and
improving comprehension.
In 2006, 80 simplification initiatives were
identified which were scheduled to deliver an estimated £158
million per year reduction in the administrative burdens placed
on our business stakeholders by 2010. In 2007, 31 of those initiatives
were delivered, 4 of which produced savings of more than £200,000
per year each. An additional 100 initiatives were also identified
which are projected to deliver an additional £39 million
per year savings by 2010. While many individual initiatives are
relatively small, their cumulative impact is high and will deliver
important improvements for the businesses they affect.
Our 2007 Simplification Plan, Cutting Red Tape,
which was published in December 2007 (copies have been provided
to the Committee) provides more detail on these initiatives and
our overall approach to better regulation. It updated our 2006
Plan, Maximising Outcomes, Minimising Burdens (available from
http://www.defra.gov.uk/corporate/regulat/pdf/simplification-plan.pdf).
The Department has in place a major review of
its working practices (Renew Defra) and is designing a new policy-cycle
process. This incorporates existing tools, refined as necessary,
and more fully integrates relevant Project and Programme Management
techniques. At various stages in the policy-cycle there will be
approvals and assurance processes to challenge policy-makers and
get them to review their thinking against better regulation principles.
The Department recognises the importance of
its inter-dependent relationship with the BRE which is helping
us to develop and deliver our regulatory reform agenda mentioned
above. We have a "Partnership Agreement" (Annex A)
which sets out a clear purpose and direction and includes mechanisms
intended to focus resources on strategic priorities and enable
Defra to regulate better to improve outcomes for our stakeholders.
Other mechanisms, considered in more detail
later on in this Memorandum, are in place which ensure a continuous
and two-way dialogue is maintained. Nevertheless, there is always
room for improvement and the Department is committed to working
to improve current working arrangements as we look to maximise
the impact of the better regulation agenda driven by the BRE.
Our views on the four areas identified in the
Committee's terms of reference are summarised below.
The extent to which the BRE developed a coherent
strategy for implementing regulatory reform
The BRE's strategy has evolved from the two
major policy reviews commissioned by the Government in 2005: The
Hampton Review and Less is More. Although this assists coherence
and direction of travel, we should not be complacent and continuous
interaction between the BRE and Government Departments will help
focus activity on tackling the major regulatory irritants.
Whether the BRE works effectively with other areas
of government to implement regulatory initiatives
There is an effective working partnership between
the BRE and Defra. A number of proven mechanisms exist for challenge,
discussion and identification of complementary initiatives. The
pace and scope of change can often be daunting and there should
be flexibility to look in more detail at balancing competing demands.
If the approach to measuring and reporting on
performance and outcomes is sufficiently robust
Mechanisms like the Standard Cost Model, the
Performance Assessment Framework and the Simplification planning
process (including reducing administrative burdens) are becoming
fully integrated across Defra. We need to build on these approaches
to ensure transparency and increased reliance on a robust evidence-base.
Whether the approach to regulatory reform is delivering
genuine results
Defra is on target to deliver, and exceed, the
25% administrative burden reduction target by 2010. We are introducing
a sea-change in the policy-cycle process to challenge the need
for regulation and promote identification of alternative (eg voluntary
approaches). The process will more effectively quality assure
policy development against better regulation outcomes.
INTRODUCTION
1. In terms of the number of regulations
introduced, Defra is the largest regulator in Whitehall. A recently
undertaken project, which is still being validated, found that
from 2000-07 the Department introduced over 1,050 Statutory Instruments
(SIs). However, against this the Department also revoked around
800 SIs, dating to 2000 or earlier. Once the data from the project
has been fully validated we will place in the Libraries of both
Houses of Parliament a short report on the outcomes.
2. The Department has undergone major re-organisational
change over the last few years and is in the final stages of our
"Renew" change programme to reinvigorate our approach
to managing our business, people and policy-making. Pivotal to
these structural changes has been our commitment to build on work
already undertaken to ensure we are amongst the leading Departments
in being an efficient and fair regulator which minimises the regulatory
burden on business, the public and the third sector.
3. Defra pre-empted the Government's cross-Whitehall
Administrative Burden Measurement Exercise (ABME) by carrying
out our own independent assessment of the administrative burdens
imposed by our stock of Regulations in 2003-04. We set our own
target of a 25% reduction in those burdens—in advance of
the same target being generally adopted across Government—by
2009 (later changed to 2010 in line with the cross-Government
target). This provided a solid foundation for us to assess the
Department's administrative burden baseline through the ABME.
4. The baseline study found that the total
indicative administrative burden imposed by Defra's stock of regulations,
as of May 2005, was £527.8 million broken-down as follows:
DEFRA REGULATIONS IN FORCE WITH AN ADMINISTRATIVE
BURDEN
Animal health and welfare regulation for
| Number of regulations | 78
|
| farm and domestic animals | Admin Burden (£m)
| 222.1 |
| Proportion of Total |
42% |
Food and farming regulations | Number of regulations
| 107 |
| Admin Burden (£m) |
149.3 |
| Proportion of Total |
28% |
Environmental Regulations | Number of regulations
| 82 |
| Admin Burden (£m) |
122.1 |
| Proportion of Total |
23% |
Rural, wildlife and fisheries regulations
| Number of regulations | 95
|
| Admin Burden (£m) |
34.3 |
| Proportion of Total |
7% |
Defra Totals | Number of regulations
| 362 |
| Admin Burden (£m) |
527.8 |
| Proportion of Total |
100% |
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5. Since May 2005, we have published three annual Simplification
Plans. The latest "Cutting Red Tape", December 2007,
includes initiatives which are projected to deliver a net decrease
of 29% in the administrative burdens imposed on business (ie net
decrease takes into account new regulations that have, or will,
come into force between June 2005 and May 2010).
6. To enable us to achieve the reductions underway, to
identify new initiatives, and to ensure that we regulate only
where absolutely necessary, the Department has in place a number
of internal procedures that help to provide a thorough scrutiny
of all policy proposals.
7. In July 2004, we set up the Ministerial Challenge
Panel on Regulation following the publication of our internal
Regulation Task Force report (April 2004). The report made a number
of recommendations for improving the Department's regulatory performance,
including a Panel for effective challenge and scrutiny of policies
to assess their adherence better regulation principles. The Panel
is currently Chaired by Lord Rooker (Minister for Regulation).
BRE is a member of the Panel. Further details on panel membership
and functions are at Annex B to this memorandum.
8. We have established Regulatory Improvement Units within
the Department's main policy Groups which, working with specialist
Legal Advisers who support individual policy teams, advise policy
officials on the regulatory process from conception through to
implementation. RIUs duties include scrutinising Impact Assessments
(IAs), maintaining details of progress on policies under development
and those in the pipeline, challenging policy-makers to think
in innovative ways, and liaising with the Department's central
Regulation Division which is responsible for corporate strategy
and guidance on the overall better regulation agenda, including
direct liaison with the BRE.
9. We have also established a Better Regulation Programme
Board. The Board's overall purpose is to assess Defra's performance
against all aspects of the better regulation agenda—including
simplification, risk-based interventions, and performance assessment—to
ensure we are delivering real outcomes for our stakeholders. Better
regulation is also one of the core areas that Defra's Management
Board reviews and mechanisms are being put in place to formally
report to the Management Board on a regular basis.
10. As described earlier in this Memorandum, under the
"Renew Defra" Programme, we are developing a new policy-cycle
process. This sets out the key stages of policy development and
includes a number of checkpoints to ensure the individual policy
complies with better regulation principles and procedures. An
integral part of the approach is to more rigorously define and
address `risk' and to ensure it is a key consideration before
policy decisions are made on the need for Government intervention.
On-line guidance will help policy-makers to better factor the
concept of risk into their work and will address the origin and
type of policy risks, how they can be assessed, managed and communicated,
and, importantly, to learn lessons from both good and poor practice.
11. In addition to the internal mechanisms set out in
paragraphs 7-10 above, all of which are being integrated into
the new policy-cycle, we have established an Economist Peer Group
to quality assure Impact Assessments. Each IA will be reviewed
by an economist unconnected with the policy area under development
and Policy officials and their dedicated economists are required
to amend and improve the IA in line with recommendations put forward.
Defra's Chief Economist's sign-off to an IA is only given once
an IA has been cleared through this process.
12. We recognise the importance our delivery partners
play in delivering the better regulation agenda. To cement that
importance we hold regular bilaterals with them at which we discuss
progress on identifying and delivering initiatives in the Simplification
Plan and further opportunities for reducing the administrative
burden on business, progress on legislative issues, such as the
Regulatory Enforcement and Sanctions Bill, plans for meeting the
Compliance Code, and progress on the Hampton Implementation Reviews.
Some delivery partners are also represented on our Better Regulation
Programme Board.
13. We also engage regularly with external stakeholders
through a range of mechanisms including meetings, workshops and
customer satisfaction questionnaires. Our 2007 Simplification
Plan, for example, which was produced following workshops involving
business representatives, was sent to around 300 businesses and
business organisations. In addition, a targeted questionnaire
obtained positive feedback on the perceived impact of better regulation
initiatives in Defra. More broadly, we are reviewing Defra's approach
to stakeholder engagement with a view to focusing on mutually
beneficial interactions at strategic level rather than relying
too heavily on single or narrow issue contacts.
14. The Department's relationship with BRE has been important
in helping us to develop and deliver the regulatory reform agenda.
Both organisations recognise the importance of co-operation as
a means to facilitate policy and business objectives. Defra operates
under the concept of "earned autonomy". This gives us
scope to determine how we go about improving the regulatory environment
across the Department to ensure the best possible outcomes for
our stakeholders, while delivering our essential policy aims on
the environment, animal health and welfare, and biodiversity.
COMMENTS ON
ISSUES THE
COMMITTEE MAY
WISH TO
CONSIDER IN
RESPECT OF
DEFRA'S
RELATIONSHIP WITH
THE BRE AND
DELIVERY OF
BETTER REGULATION
OUTCOMES
15. Defra recognises the importance of, and its contribution
to, the better regulation agenda set by the BRE. Defra welcomes
a wide range of initiatives introduced by the BRE which have improved,
and will continue to improve, the better regulation drive. For
example:
— the new Impact Assessment process is a major improvement
which requires policy-makers to more fully and accurately calculate,
in a transparent and upfront way, the costs and benefits of policies
and to provide robust evidence to support their proposals;
— the training and guidance provided by BRE on the
new IA process has been invaluable in enabling the Department
to roll it out to policy officials and in providing online advice
on IA completion;
— the 90 Day Simplification Portal, which allows
business to identify regulatory areas which might be simplified
and on which departments must respond within 90 days, is an effective
means by which business can point to potentially burdensome requirements
and interact with officials on the regulatory reform agenda—although
we accept that the Portal needs to be kept under constant review
to ensure it is effective;
— the introduction of annual Simplification Plans
to measure departments' progress in delivering the overall Government
target of reducing administrative burdens by 25% by 2010 has focused
attention on improving the regulatory framework and provides a
means of holding departments to account publicly;
— the proposed new Code of Practice on producing
guidance will, once finalised, help to ensure that departments
apply best practice standards in producing user friendly guidance
to support new regulations, in good time;
— the proposed new Code of Practice on consultation
which builds on, and modifies, the existing Code and will help
to ensure more targeted, user friendly, timely and effective consultation
with business and others;
— meetings of senior civil service Board Level Champions
to identify, discuss and resolve cross-cutting and specific regulatory
issues and to assist in setting the approach across Government;
— the proposed development of a new central IA Library
for all published IAs will be an invaluable resource for business
and policy officials providing a comprehensive, centrally stored
database of IAs to aid understanding and development of new assessments;
— the Compliance Code will formalise and give a
statutory base to the Hampton better regulation principles and
ensure that delivery bodies can be held to account in the way
that they introduce and administer regulatory requirements and
supporting processes; and
— the Hampton Implementation Reviews of regulators,
and the review led by Prof. Macrory (who reported on applying
civil penalties for regulatory breaches), will demonstrate where
the recommendations of Hampton have been successfully implemented,
highlight areas for development, and assist the sharing of good
practice between regulators.
16. Defra also believes that since 1997 the better regulation
agenda, led by the BRE, has gained a higher profile not only across
government but within and across all industry sectors.
17. Overall, better regulation thinking and culture is
increasingly becoming an integral part of policy development and
annual Departmental Reports include, as a matter of course rather
than an afterthought, a clear focus on better regulation achievements
and plans.
18. Defra also believes that broadly effective challenge
and scrutiny arrangements are being put in place and would argue
that Parliament is provided with more analytical and focused IAs,
as well as better regulation information in supporting Explanatory
Memoranda, as a matter of course.
19. Wherever possible, Defra continues to ensure Common
Commencement Dates are met—to ease both the Parliamentary
burden and the burden on business—but we would make the
point that around 60-70% of our regulation is EU-based and timing
is dictated by EU requirements.
20. In respect of evaluation, we accept that the Standard
Cost Model, which has been adopted for recording and monitoring
progress towards the 25% administrative burden reduction target,
is not a statistically reliable model. However, it does provide
an indicative figure of the burden associated with interventions
and BRE has recently launched an on-line calculator to capture
the burdens and simplifications more centrally, which is a helpful
development.
21. When the BRE replaced the Regulatory Impact Unit
in 2005, there was an increase in its size and a corresponding
increase in the scope of its activities. This produced heightened
action across a broader range of areas and has meant a far greater
number of initiatives which are invariably time-bound. Resource
is clearly a consideration in such circumstances. We also need
to ensure our core priorities continue to be clearly understood
by business.
22. We believe there is scope to work together with the
BRE, and other Government departments, to address these issues
and look to develop a longer-term plan, with a strategic direction
set for the future, that would identify what the post-2010 better
regulation climate might comprise. This could enable, for example,
longer-term planning to ensure BRE and departments undertook shared
evidence gathering and analysis of the impact of proposed initiatives
on the delivery of existing activity.
23. In support of this, we would propose more frequent
discussions between Defra policy-makers, BRE and business interests
to ensure a balanced view is obtained. Policy-makers might also
welcome more collaborative interaction with BRE.
24. It is important to note that the BRE's account manager
based structure has assisted two-way communications and raised
the standard and regularity of cross-organisation interactions.
Bilateral meetings are now more common and focused on joint priorities
and they complement other mechanisms such as the MCPR and the
Department's Better Regulation Programme Board.
25. The BRE's primary function is to champion good policy-making,
embed better regulation principles, promote early engagement with
stakeholders, and integrate rigorous cost-benefit analysis into
the development of polices and legislation in Whitehall. This
role requires the BRE to maintain the highest possible standards
of best practice in designing and implementing workable cross-cutting
laws and policies, and we will continue to support them in that.
CONCLUSION
26. In conclusion, Defra believes the regulatory reform
agenda is working well and producing clear results and benefits
to our stakeholders. As Defra's Simplification Plans demonstrate,
we are delivering a wide range of meaningful reforms that are
having a significant impact on business and improving the overall
regulatory framework for which we are responsible.
27. The BRE is pivotal in driving the better regulation
agenda and contributes effectively to promoting and enhancing
the better regulation philosophy both nationally and within the
EU. We have in place a number of proven mechanisms for identifying
jointly what our priorities should be for working in tandem and
for measuring and reviewing success.
28. However, we should continue to review working practices
to ensure that we focus action and attention on those initiatives
which have the capacity to deliver the greatest outcomes. This
would enable us to reinforce the need for early engagement between
the BRE and Departments, and the importance of collecting full
and balanced evidence which takes account of the practical, as
well as the well-intentioned, impact of Government initiatives.
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