Select Committee on Regulatory Reform Minutes of Evidence


Memorandum submitted by the Department of Health

EXECUTIVE SUMMARY

  The Department of Health (DH) welcomes this opportunity to set out its position on working with the Better Regulation Executive. Through our ongoing work on Better Regulation we aim to further reduce unnecessary burdens on the business, charitable and voluntary sectors and on frontline public sector staff, enabling them to do what they do best, delivering better services and developing world class products.

  The Secretary of State for Health has made a strong commitment to this agenda and we are undertaking a fundamental reform of health and adult social care regulation and inspection, with the creation, subject to Parliamentary approval, of the Care Quality Commission. The Commission has, subject to parliamentary approval the five principles of good regulation amongst its guiding operating principles.

  This evidence addresses the terms of reference set out by the Committee. Additional information about the Department's work to deliver the better regulation agenda can be found in The Department's Simplification Plans, Year One and Two which are on the DH website at:

    The Department's Simplification Plan, Year One (Dec 2006)

    The Department's Simplification Plan, Year Two (Dec 2007)

  The Department's aim to deliver better regulation relies for its success on early and effective engagement with stakeholders in business and the community. The Department owes much to the efforts of our wide range of stakeholders and we welcome their continued strong engagement and support in this programme of work.

  By December 2007 the Department has delivered 13% (155m) of our 25% target to reduce, by 2010, our private sector administrative burden of £1.2 billion. It is however clear from discussions with stakeholders there are more savings in the pipeline and the Department fully expects to exceed its 25% target by 2010. Of the overall burden, over 90% comes from two business areas—medicines regulation and adult social care.

  In addition to work to deliver benefits for the private sector, the latest Simplification Plan places equal emphasis on the public and third sectors, including an ambitious range of measures designed to deliver better regulation improvements identified by stakeholders in these sectors. This includes a commitment to leading the way in delivering the government's public sector strategy: Cutting bureaucracy for our public services, and to build on the Department's recognised success in working with the Third Sector.

  Over the last two years, the Department has worked to overhaul its approach to better regulation activity, building on previous success and embedding the better regulation philosophy as a core part of its objective to develop excellence in policy making. The emphasis of the DH better regulation team is to mainstream the better regulation agenda through existing structures and throughout the policy community, and the support of the BRE has been key in working towards achieving this.

  We believe the Department has an effective and mutually supportive relationship with the BRE. This is helping us support delivery of an ambitious programme of regulatory reform recognised by our stakeholders.

  In terms of strategic leadership, we find the direction given by the BRE to be helpful, generally setting out a clear purpose and direction supported by a close working relationship at an operational level, through the BRE account management approach.

  Other systems and processes covered in more detail later in this Memorandum, help ensure a regular dialogue between DH and the BRE.

The view of the Department of Health on the four areas identified in the Committee's terms of reference are summarised below:

1.  Has the BRE developed a coherent strategy for implementing regulatory reform?

  The strategic approach taken by the BRE builds on the recommendations of two major policy reviews commissioned by the Government in 2005: The Hampton Review of regulation and inspection[1] and the Better Regulation Taskforce report "Less is More".[2] There have been a series of initiatives since, designed to deliver the recommendations of the two reviews and deliver the regulatory reform agenda. In terms of simplicity of approach, this helps ensure coherence. Overall, DH recognises the approach taken, and has used this to help focus and support the needs of stakeholders within a public service delivery department. Following the creation of the BRE in 2005, the initial focus was on improving competitiveness of UK PLC, and it has taken time for the BRE to focus clearly on the needs of the public sector, with the launch of the public sector strategy in June 2007.

2.  Does the BRE work effectively with other areas of government to implement regulatory reform initiatives?

  BRE are very engaged on the range of better regulation work being undertaken by the department and its arms length bodies (ALBs). We believe that there is an effective and constructive working arrangement between the BRE and DH, with a shared understanding of the priorities, systems, processes and approach taken by the Department in delivering its policy objectives. At times, despite recognition from the Department as to the importance of the range of initiatives, we struggle with maintaining the necessary pace and scope of delivery, whilst attempting to balance this with the need for cultural change.

3.  Is the approach to measuring and reporting on performance and outcomes sufficiently robust?

  DH recognises the importance of a number of supporting mechanisms introduced and championed by the BRE, the Department has actively been involved in development of some of these in advance of implementation. These include the new Impact Assessment process, development and publication of Simplification Plans, the Administrative Burdens Measurement Exercise (ABME). We also recognise the BRE's value in providing feedback on the Department's performance and as an additional channel for stakeholders to raise suggestions for simplification of regulation. These have in turn enabled DH to have a better, shared understanding of issues facing its stakeholders.

  The renewed focus on the Impact Assessment with revision of the process and greater focus on quantification and with Chief Economist and Ministerial sign off is a positive step improving the evidence base and options appraisal for new policy.

4.  Is the current approach to regulatory reform delivering genuine results?

  DH is on target to deliver and exceed its 25% administrative burden reduction target by 2010. While the programme was initially over ambitious and sprung on departments part way through a financial year, making considerable demands on internal and stakeholder resources, the ABME's focus on burdensome regulatory process has been beneficial and added impetus to a number of better regulation initiatives which we believe are delivering real benefit.

  We also have an ambitious programme of work to deliver benefits identified by our public and Third sector stakeholders. Together we believe this adds up to a significant step forward, although we are not complacent in recognising that the work programme needs refining to reflect changing demands in the overall health and social care environment.

  There have been significant successes, some recognised internationally, such as the Better Regulation of Medicines Initiative (BROMI) which, in 2007 received the SCM Network award and was a finalist in the National Business Awards, Better Regulation category. In its evaluation of Impact Assessments (2006-07), the National Audit Office commended DH for its governance procedures and for the positive promotion and mainstreaming the principles of better regulation into working practices.

DEPARTMENTAL CONTEXT

  1.  The Department, its Arms Length Bodies and delivery chain have undergone significant change over the last few years. Critical within this has been the commitment made to build on work already undertaken to ensure the principles of better regulation are actively demonstrated in the structuring and responsibilities of individual organisations and their role in the whole system to minimise the regulatory burden on business, the public and third sector.

  2.  DH has a strong legacy of delivering better regulation improvements that pre-date the existence of the BRE. These were predominantly improvements facing the public sector frontline.

  3.  Since the establishment of the BRE, DH through partnership working with the BRE has continued to demonstrate significant progress on the better regulation agenda. The following section sets out examples of how this partnership approach has delivered improvements.

  4.  Initially early focus of the BRE was private sector facing, and DH played a full and active role in engaging with this work, particularly the ABME. The administration costs of compliance with private sector regulation in force in May 2005 was estimated at £1.2billion.[3] More than 90% of the burden fell on two areas of the department's business: the pharmaceutical sector and adult social care.

  5.  DH is projected to deliver a net reduction of 25.8% (£300 million) of the £1.2 billion baseline by May 2010.

  6.  Simplification of DH regulation has benefited the private sector through less burdensome processes. This is supporting the increased profile of the better regulation agenda in general, and increased awareness amongst officials of the importance of how we regulate, and the added impetus to development of better regulation initiatives. The development of the Care Quality Commission, is a good example, with numerous overarching better regulation aspirations in the enabling legislation going through Parliament currently. We recognise some stakeholders are concerned that the focus on administrative burdens is at the expense of lower cost simplification measures which are often major irritants to business However, examples such as BROMI (see above) and work the Human Fertilisation and Embryology Authority (HFEA) introducing a risk based approach to inspection leading to a 40% reduction in the number of future interim inspections, which addressed an issue small in admin burden terms but a major irritant to the sector, show DH has been alive to this concern. The Department fully expects to exceed its 25% target by 2010 following reform of regulation of health and adult social care, further savings from extension of the Better Regulation of Medicines Initiative (BROMI) and work to reduce regulatory burdens from European medicines directives led by the European Commission.

CULTURAL CHANGE

  7.  To enable us to achieve the reductions underway, to identify new initiatives and to ensure that we regulate only when necessary, the Department has established a number of systems and processes that help to provide a more effective scrutiny of new policy proposals and support cultural and behavioural change across the department, through:

    —  Establishing a core better regulation unit incorporating a wide range of better regulation activities, including proactively identifying future consultation activity and rolling out consistency of approach across all of our Arms Length Bodies.

    —  Establishing a robust corporate governance regime with Board level and Ministerial commitment and support, this was commended in a recent National Audit Office report.[4]

    —  A stated aim being to deliver excellent policy making and production of a Guide to Better Policy Making which emphasises the importance of rigorous and early impact assessment. An extended network of better regulation champions in key policy areas within the department, its agencies, and arms length bodies.

    —  Strong engagement on key elements of our work programme from external stakeholders eg BROMI and work the HFEA and Human Tissues Authority undertake to engage effectively with stakeholders.

    —  Guidance on Minsterial submissions to support the new impact assessment assurance processes.

    —  Policy teams encouraged to identify the information obligations in proposals.

  8.  In addition to the internal systems and processes identified in paragraph 7 above, we have introduced a range of internal training courses and better policy making master classes to embed the understanding of better regulation.

  9.  We recognise the importance our Arms Length Bodies play in delivering the better regulation agenda. To underline this importance the Healthcare Concordat was established in 2004 to promote co-ordinated inspection and minimise the burden of data collection on provider organisations.

  10.  The Concordat has been a significant achievement in itself, having produced some real benefits since its launch, such as more co-operative approaches to scheduling reviews and less burdensome processes of review and inspection. It is recognised that there is still more to do to reduce the burden of inspection, in particular in acting on the things that matter most to health and social care provider organisations. To this effect, a provider advisory group comprising public and private sector organisations has been formed to ensure the work of regulatory bodies in health and social care are tackling the right issues at the right pace.

  11.  The Concordat has acted as a successful model for developing similar codes of practice, for example, the Concordat between bodies regulating inspecting and auditing health and social care in Wales. The Higher Education Regulatory Review Group (HERRG) have also drawn on learning from The Concordat to help shape the concept of their own Better Regulation Concordat.

  12.  The Department and its Arms Length Bodies relationship with the BRE has been important in helping us to develop and deliver the regulatory reform agenda. The BRE have been active in supporting the work of the Concordat through identifying skills and expertise that they can bring to bear to add value to the work of other bodies. This has been seen most recently with help in designing an approach to piloting risk summits bringing together a range of regulatory bodies at a local level to identify innovative ways of reducing the cumulative impact of inspection activity. The Department and its regulatory bodies have recognised the importance of co-operation with the BRE as a direct means to facilitate the delivery of key policy objectives.

THE DEPARTMENT OF HEALTH'S RELATIONSHIP WITH THE BETTER REGULATION EXECUTIVE (BRE)

  13.  DH has a good working relationship with the BRE, characterised by a common agenda and an effective, constructive partnership arrangement. Both DH and the BRE have offered strong support in working with stakeholders on the better regulation agenda. This involves engagement and support, especially when (as is often the case) working with small teams. This dialogue has been genuinely two-way, with an open and honest assessment of issues and alerting each other when support is required.

  14.  DH and the BRE have taken a partnership approach to stakeholder engagement wherever possible, making joint visits and presentations to industry, public sector representative bodies and frontline staff. This has helped underline and reinforce the commitment with our stakeholders that throughout government there is a serious intention to make improvements in the better regulation agenda. In particular the alerting each other to where support is required.

  15.  The BRE have put in place a number of channels to help communicate effectively with individual and groups of Departments, as well as the account management approach, meetings of Departments with common interests (such as public sector delivery Departments) have been convened. In addition to this, there are regular general meetings for all Departments, such as Board Level Champions and Better Regulation Unit leads, as well as thematic meetings such as consultation co-ordinators, and Impact Assessment leads. DH believes that these add value to the overall understanding and help Departments in delivering on the BRE's expectations.

  16.  DH also believes and welcomes the attention that the BRE has drawn to the better regulation agenda, raising the profile of this work not only within government, but also across the public, private and third sectors. Through effective partnership working with the Department, this has led to a greater recognition and understanding of the potential impact and benefits of this work with our stakeholders.

SPECIFIC INITIATIVES INTRODUCED BY THE BRE

  17.  DH recognises the importance of and strategic contribution to the better regulation agenda set by the BRE. DH welcomes a wide range of initiatives introduced by the BRE, which have improved our understanding and delivery of the better regulation agenda. For example:

    —  the ABME work, including the application of a Standard Cost Model, giving comparability across:

    —  the new Impact Assessment process is a significant improvement which has enabled better evidenced based policy making within the Department and across Government. This in turn has helped build effective overview and scrutiny arrangements for Parliament and the public. The introduction of this was particularly welcomed with effective engagement of DH in the development and provision of guidance and training in the rollout;

    —  the introduction of Simplification Plans on an annual basis, allowing Departments the opportunity to bring together their diverse range of activity on better regulation together in a single place. The simultaneous publication across Government facilitated by the BRE, has also helped raise the profile of this with our stakeholders;

    —  the introduction of the Simplification Portal providing a conduit for better regulation concerns to be raised by stakeholders and acted on by departments;

    —  the introduction of a public sector strategy, which has provided a locus for this work, empowered the Department in its engagement with public sector representative bodies, and given some tangible focus (such as the 30% Comprehensive Spending Review target for a reduction in the burden of central data collections);

    —  proposals for a new code of practice on consultation, which will build on the most effective elements of the existing code, as well as introducing more transparent evidence incorporating the views of consultees in the development of policy;

    —  McCrory powers following on from Hampton review compliance, identifying success, highlighting areas for development, and facilitating the sharing of good practice; and

    —  piloting work, focussed in particular sectors, such as the work with the Office of the Third Sector, and several Departments (including DH) on looking at innovative approaches to reducing the burden of monitoring and reporting in the Third Sector.

  18.  Although DH has welcomed the introduction of many initiatives, leading to a varied and active programme of work recognised by our stakeholders. The challenge of implementation has been very significant.

  19.  DH as a public sector delivery department are keen that the BRE maintains a public sector focus on their work now that they have moved from Cabinet Office to the Department for Business Enterprise and Regulatory Reform.

  20.  The BRE have been engaged with the European Commission (EC) and contributed to the establishment of a 25% target and we look forward to their continued active support of departments' agendas in Europe. On a practical note, they should continue to challenge in Europe on widespread and effective use of impact assessments. This aids departments as they seek to ensure that the introduction of new legislation and regulation has a minimal burden on our stakeholders.

CONCLUSION

  21.  DH believes, the work on better regulation delivered by the core Department and its arms length bodies has been supported by the BRE. There has been positive recognition of the initiatives by a range or stakeholders, and the progress made covering private, public and third sectors adds up to a significant contribution across government. This is reflected in the Department's Simplification Plans.

  22.  The role of the BRE in enabling this programme of action has been key. They have effectively contributed to setting the overall context and strategy within which the Departmental framework has been constructed. There have been a number of positive examples where the partnership approach taken between the BRE and DH have successfully identified priorities for action and facilitated the Department to deliver tangible benefits.

  23.  Within the approach taken to date, there are a number of learning points that can be drawn out to successfully enhance our working relationship going forward. Both the BRE and DH recognise we have a common agenda to improve policy compliance by simplifying regulation and being proportionate in our approach. We believe there would be significant potential benefit in considering a more flexible approach, taking account of the relative demands faced by individual Departments in the size and scale of their activities.

  24.  From DH's perspective, this can best be achieved by early engagement with Departments about the overall strategy, allowing sufficient flexibility for implementing initiatives, and by effectively reviewing the outcomes to take account of the impact of the Department and the BRE's approach.

March 2008









1   Reducing Administrative Burdens: Effective Inspection and Enforcement, Philip Hampton, March 2005. http://www.hm-treasury.gov.uk/media/7/F/bud05hamptonv1.pdf Back

2   Regulation Less Is More, Reducing Burdens Improving Outcomes, A BRTF Report to the Prime Minister, March 2005 http://archive.cabinetoffice.gov.uk/brc/upload/assets/www.brc.gov.uk/lessismore.pdf Back

3   DH Administrative Burdens Measurement Exercise August 2006. Back

4   Evaluation of Regulatory Impact Assessments 2006-07, NAO, 2007. Back


 
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