Memorandum submitted by the Department
for Work and Pensions
1. INTRODUCTION
1.1 This memorandum provides the Department
for Work and Pensions' written contribution to the Regulatory
Reform Committee's inquiry into the Better Regulation Executive
and the impact of the Better Regulation Agenda.
1.2 The Department welcomes this opportunity
to set out its position on the work of the Better Regulation Executive
in providing a coherent strategy for implementing regulatory reform
and simplification.
1.3 The Department has set in place processes
to deliver its target of a 25% reduction in the administrative
burdens of regulation on business and also to reduce the burdens
that it places on the third sector, its customers and on its own
front line.
1.4 The success of these processes in reducing
burdens will be enhanced through building on the current relationship
with all the Department's stakeholders including the Better Regulation
Executive.
2. Has BRE developed a coherent strategy for
implementing regulatory reform?
2.1 The main points of the Better Regulation
Executive strategy this memorandum addresses are:
— The Administrative Burdens Exercise;
— The Public Sector Strategy;
— Reduction in data requests;
— Reduction in burdens on the third
sector;
— Legislative Reform Orders;
— Common Commencement Dates; and
— The Better Regulation Website.
2.2 The Department for Work and Pensions
believes that this is a significant and coherent body of work
that is helping to drive culture change in Whitehall and this
Department. The Department also recognises the Better Regulation
Executive has to influence departments, and that the challenge
this provides to departments is a core purpose of having a central
function.
2.3 The Department also welcomes the regular
engagement to discuss the substance of the strategy which ensures
that decisions on future work will be a collaborative exercise.
The Department recognises the Better Regulation Executive will
continue to develop the scope of work to ensure the increasingly
effective management of regulatory burdens.
2.4 Administrative Burdens Measurement Exercise
2.4.1 The Department for Work and Pensions
has fully supported the Administrative Burdens Reduction Programme
in principle and in practice. The Department has delivered a net
reduction of £67 million per year so far and expects to exceed
its 25% reduction target in 2008. This would mean that the Department
would have exceeded its target two years ahead of the deadline
of 2010.
2.4.2 The measurement of administrative
burdens from regulation introduced before 31 May 2005 took place
between autumn 2005 and spring 2006. The Department has applied
the same methodology to calculating the administrative burden
of regulation introduced since 1 June 2005 with the assistance
of business experts to ensure the accuracy of the figures.
2.5 The Public Sector Strategy
2.5.1 In June 2007, the Government published
a strategy for Cutting Bureaucracy for our Public Services.
The Department is fully supportive of the aims of the strategy.
The Better Regulation Executive has shown flexibility in this
area for which the Department is grateful. Internal processes
were already in place in June 2007 and the acknowledgement that
the Department's programmes were likely to deliver the desired
results has allowed for uninterrupted progress towards the shared
aims.
2.5.2 The Department's Benefit Simplification
Unit has been effective at ensuring that efforts to remove complexity,
for both staff and customers, are integrated in Departmental decision
making. The Unit has identified a range of simplification measures
to the benefit system.
2.5.3 The Department is also in the early
stages of a major change programme that aims to improve the effectiveness
of policies, the efficiency of operations and the level of customer
service provided for the millions of people the Department interacts
with every year. Over the previous 12 months the Department has
started to engage in continuous improvement using Lean techniques.
This approach, in which customers, and the knowledge and insights
of staff, are the focus of service improvement, is being used
to streamline processes across the Department.
2.6 Reduction in data streams
2.6.1 Along with other government departments,
the Department has agreed to reduce the number of data requests
required from local authorities by 30% by 31 May 2010. Progress
has already been made on reducing the number of data requests
and the Department is confident that it will deliver reductions
in excess of 30% by the 2010 deadline.
2.7 Reduction in burdens on the third sector
2.7.1 The Department is working with New
Philanthropy Capital, a charity that advises donors and funders
on how to ensure their money has high impact. The aim is to provide
case study evidence of the burden from monitoring and reporting
requirements experienced by the third sector when engaging with
the Department's contracts.
2.8 Legislative Reform Orders
2.8.1 Although one of the first departments
to make use of Regulatory Reform Orders, to date the Department
has not undertaken regulatory reforms that have made use of a
Legislative Reform Order. However work is being undertaken to
investigate further administrative burden reductions to private
pensions legislation which might be suitable for a Legislative
Reform Order.
2.9 Common Commencement Dates
2.9.1 Although comparatively little Department
for Work and Pensions regulation impacts on business, the Department
was one of the first to adopt the Government's policy that domestic
regulation which impacts on business should commence on one of
two dates (6 April and 1 October) each year. This limits the dates
when regulatory changes can be made, enabling business to plan
for new measures and to implement them effectively. It has occasionally
been necessary to introduce some legislation slightly earlier
than 6 April in order to tie-in with commencement of the Pension
Protection Fund's accounting year (1 April).
2.10 The Better Regulation Website
2.10.1 The Better Regulation Executive has
improved the Better Regulation website to include suggestions
for savings to the public sector, third sector and the citizen.
The Department for Work and Pensions has only received a small
number of suggestions and is taking forward one suggestion in
part.
2.10.2 The Department recognises the importance
of the site in connecting with members of the public, allowing
them to identify their major regulatory irritants. The imposition
of deadlines for response and the ability for the public to monitor
progress of their suggestions is an important step in ensuring
that there is a tangible link to government and that issues raised
are being considered.
3. Does the BRE work effectively with other
areas of government to implement regulatory reform initiatives?
3.1 The relationship between the Department
for Work and Pensions Better Regulation Unit and the Better Regulation
Executive is on a strong footing. The Department recognises the
difficulties any central function has in establishing itself and
ensuring that there is traction for its initiatives. The Department
and Better Regulation Executive have built up a collaborative
way of working that helps to ensure they are pushing in the same
direction.
3.2 The Department for Work and Pensions
sees the relationship as one where the Department is the focus
for its own work on regulation and that the Better Regulation
Executive provides support and challenge.
3.3 The team within the Better Regulation
Executive that shadows the Department for Work and Pensions is
benefiting from greater inclusion and influence over the direction
and development of policy within the Department. The Department
recognised that for the Better Regulation Executive to provide
an effective challenge, it needed to give it more exposure within
the Department to ensure there is a greater understanding of the
policy and engagement context of the Department.
3.4 This involvement has enabled the Better
Regulation Executive to develop a better understanding of the
Department's priorities and it is important that the Department
facilitates the continuation of this process.
3.5 The Better Regulation Executive has
a representative on the Department's Better Regulation Stakeholder
Group. This group, chaired by the Department's Better Regulation
Minister, provides a mechanism for working with representatives
of its major stakeholders on better regulation and issues around
the benefits structure.
4. Is the approach to measuring and reporting
on performance and outcomes sufficiently robust?
4.1 There has been significant pressure
for a number of years on government to reduce the burden of regulation
impacting on business. In response to this, the Department has
been rigorously applying the better regulation principles to its
policy development process.
4.2 The development of a consistent and
robust administrative burdens reduction measure and framework
has been crucial to success. The measurement of administrative
burdens was carried out in accordance with the framework and methodology
set out in the Standard Cost Model.
4.3 The model relies on the input of a limited
number of experts and/or businesses and as such does not produce
a statistically representative measurement of costs. Rather, it
is a pragmatic approach to measurement that gives an indicative
estimate of the size of costs and provides a starting point for
setting reduction targets and highlighting the areas to focus
upon.
4.4 The Department believes that targeting
the administrative burdens of regulation placed on business is
the most effective method for reducing the cost and that setting
a challenging target is necessary to drive reform and to demonstrate
the commitment of government to this issue.
4.5 The Department for Work and Pensions
has welcomed the new Impact Assessment process with the improved
focus on the costs and benefits analysis of new policy proposals.
The Departmental Better Regulation Unit has arranged for policy
and analytical colleagues to undertake training in the new impact
assessment process. The Department has fully implemented the Impact
Assessment into its policy development process and is finding
it a useful tool for streamlining the design of policy compliance
costs.
5. Is the current approach to regulatory reform
delivering genuine results?
5.1 The success of regulatory reform is
measurable in its impact through the Departmental simplification
plan. A 25% reduction in administrative burdens of regulation
provides a sound base for the Department's wider programme of
reform. In addition, the exercise has assisted in developing a
culture within the Department that considers the possible administrative
burden of new policy proposals and uses the Impact Assessment
process to design simpler compliance processes.
5.2 The Department will have reduced the
administrative burden of its regulation on business by £129
million per year, net of new burdens, by October 2008. This is
a 27% reduction but is viewed within the Department as an ongoing
process rather than a completed process. Additional work is underway
to seek further reductions in regulation relating to pensions
and Statutory Sick Pay. Two measures arising from the rolling
deregulatory review of private pensions legislation are included
in the current Pensions Bill—the average annual savings
resulting from those measures are estimated to be in the region
of £250 million (2007-08 prices). Total savings up to 2050
are estimated to be £4.4 billion. Work on other areas of
pension legislation continues.
5.3 The Department recognises that, in some
cases, the removal of individual burdens may not be significant
for individual businesses as the total administrative burden of
some regulations is cumulative across all businesses rather than
a large burden on a few. However, this should not deflect departments
from reducing administrative burdens as the cumulative effect
of this could be substantial. This can also assist in embedding
the principles of better regulation into policy development processes.
5.4 The Department for Work and Pensions
welcomes the recognition of the Better Regulation Executive that
work needs to be undertaken to ensure that business understands
regulatory reform and simplification initiatives. The Department
will work closely with the Better Regulation Executive to ensure
that all stakeholders have an understanding of the simplification
measures that have been made and what they mean for them.
5.5 The Department also thinks the approach
is one which has wider application. In particular to deliver visible
simplifications to citizens, the public sector and the third sector,
the Department is changing the way services are provided by embedding
a culture of simplification. The Department appreciates that its
staff are well placed to recommend areas for simplification and
therefore they are at the forefront of the Department's change
programme and benefit simplification work. The Better Regulation
Executive has acknowledged this and has introduced a similar programme
across other departments.
March 2008
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