Select Committee on Regulatory Reform Minutes of Evidence

Examination of Witnesses (Questions 121-139)


13 MAY 2008

  Q121 Chairman: Welcome, gentlemen. We have a lot of questions for your organisations to answer today. If I cut you off at any point, please feel free to follow up in writing. You will get the flavour of the themes we are trying to gather information on. Some of my colleagues will be coming and going as well, as there is an awful lot happening today. I want to ask all of you about your experience of working with BRE, what value it has had—does it have the right people; is it organised in a way that helps you; and does it talk to you enough? For my own convenience, I will start to the left with you, Mr Wilmore, and move across, just posing those introductory questions to you.

  Mr Wilmore: Thank you and good morning. From the Department of Health perspective, we have a very positive relationship with the BRE. We have a good day-to-day working relationship with the officials there. They have worked hard to understand our agenda and the particular issues facing health and social care, which are often very complex in a regulatory environment. Generally speaking, we feel that the balance between being a critical friend and challenging, offering advice and support, and the generic learning we can pick up from having a central government point of expertise works well; so we would generally say "yes" to your question. The relationship works well and the process does add value, and it allows us to promote the Better Regulation agenda with a bit more teeth across the Department and within the sectors that we work with.

  Mr Podger: Chairman, our experience in the Health and Safety Executive is pretty similar. Currently, we have very good relations with the BRE, both formal and informal—which is also important. We have ourselves seconded staff to the BRE, which is a measure of confidence. Obviously, the BRE does play a challenge function in relation to us, which we accept and have no problem with; but inevitably it means that from time to time we do not agree, and I think that is perfectly proper.

  Q122  Chairman: Can you give examples?

  Mr Podger: We have had quite a number of discussions with BRE in relation to inspection of premises and the value of inspection. They, quite understandably, tend to come from a business perspective, which is not, shall we say, over keen on inspection! We ourselves, although in no sense manic inspectors—I would stress that—do see a need to use inspection both as an advisory tool but also as an enforcement tool; so there are certainly areas for legitimate argument.

  Mr Huddleston: I would agree very much with the broad thrust of my colleagues' remarks; it is a positive relationship. Also it is worth saying that it is tailored to the particular challenges that we face. Our relationship has evolved over time, as the Better Regulation agenda has broadened into areas beyond business. We have a range of day-to-day contacts with account managers to more formal arrangements with Better Regulation Executive colleagues sitting on our Better Regulation Stakeholder Group, which is chaired by our Minister. Quite often, the Better Regulation Executive, meeting bilaterally with, say, policy folk, leading on pensions and issues like that, would get directly involved in the thinking about policy. Certainly over the couple of years I have been working with BRE, I welcome the flexibility of finding the right relationship for the right challenge.

  Mr Gregg: Since I took up my current role in July, I think my experience would point to BRE as being a driver both in direction and pace in terms of value and assisting driving the development of common shared strategy across Whitehall, producing mechanisms that enable read-across between departments and co-ordination of where pressure points are likely to be felt. I think their role, as voice of business, can be very helpful in that it backs up our own attempts to get out and manage effectively our stakeholders. In terms of the right people, for an organisation of a hundred they have some very senior people in there, with a good mix, including from the business sectors. I think that, too, is helpful, to bring that reality and real experience, which may contrast with some of our officials. In terms of whether they talk enough—yes, they make every effort to talk and, more importantly, to listen.

  Q123  Lorely Burt: There we are; we might as well all go home then: everything in the garden is completely rosy! Mr Wilmore, in your memorandum you talk about alerting each other when support is required and you have positive examples of where the partnership approach taken between the BRE and the Department of Health have successfully identified priorities for action, and facilitate the Department to deliver tangible benefits. Can you give us an example or two of that?

  Mr Wilmore: There are two main areas in relation to both private sector and public sector. Obviously, as the Department of Health, most of our activities are public sector related. Most of the work we have been doing with the BRE is related to the public sector strategy over two or three strands. One is reducing duplicative and unnecessary data collections from the NHS, where we have achieved about 10% reduction already. This is quite a complex agenda given the range of data that is collected, the uses of it and the lead-in times being quite long to change that. That is one example. We have also had a lot of support from the BRE in developing what we would call a concordat arrangement, which is led by our main Health Service regulator, the Healthcare Commission, which brings together users of information from the Health Service to try and avoid duplicate and overlapping inspections of data collection as well. They have been very supportive in facilitating that process and setting out the cross-government context with key stakeholders.

  Q124  Lorely Burt: Defra sent a copy of its partnership agreement with BRE, and that sets out working on matters such as information-sharing, targets and monitoring. Is your concordat something similar to that?

  Mr Wilmore: The concordat is more about the relationship we, as a department, facilitate alongside BRE with our various regulatory bodies under the bodies that have a need to visit and inspect and collect information from the Service; so it is not a direct comparison. We do not have, as a department, a formal partnership arrangement with BRE. Things have worked generally well and we have not felt the need to have that.

  Q125  Lorely Burt: You have not got anything that formally framed your relationship with them.

  Mr Wilmore: Not in the way of a formal partnership document.

  Q126  Lorely Burt: Can I ask the same question to Mr Huddleston about how you frame your relationship because you do not have a partnership agreement, as I understand it?

  Mr Huddleston: We do not, and I think that reflects on what I was saying in answer to the first question. There is a flexible relationship tailored to the challenges we face. Within the Department for Work and Pensions we have a fairly broad-based commitment to Better Regulation, particularly on the pension side, but more broadly in terms of the benefit system itself and the burdens we place on citizens and front-line staff. In that instance, where we are seen as going with the flow, actually having a detailed concordat is not really necessary. I guess I make the distinction between almost a principles-based approach to the relationship than a rules-based approach. We both know the outcomes we are trying to achieve; let us get on and do it and not bother too much about the detail of agreements.

  Q127  Dr Naysmith: Should the Department have one major strategic vision or should it presume a number of goals based on expediency and what is likely to get results? Are the BRE's expectations of departments realistic, and does it have a coherent strategy and firm grip of the objectives?

  Mr Gregg: Absolutely so. Certainly my experience of attending the board level Champions meeting is that collectively departments work with BRE to develop that strategy, but we are still in relatively early days from their formation. The challenges get greater in terms of what we have to do for business, and that strategy has got to be responsive. It is true to say that there is a feeling sometimes of initiative overload—have we got the priorities right, because resources are tight and if new developments come forward somehow we have to take those up? Departments can challenge back when there are ideas. In answer to your key thrust, yes, there is a coherent strategy in that we are trying to find the right mechanism collectively for balancing the needs of protection versus the burdens that that creates for business.

  Q128  Dr Naysmith: You are quite clear it has one strategic vision and you are in no doubt about that?

  Mr Gregg: The strategic vision falls within that objective, a shared objective: we are collectively trying to achieve our outcomes, and in terms of Better Regulation, it is "better" regulation. Regulation itself is certainly for Defra the main plank in how we seek to achieve our outcomes.

  Mr Huddleston: I would agree with most of that. The overall vision the BRE is putting forward is a clear one and is certainly shared with the Department for Work and Pensions. That embraces not just the ambitions and not just reducing unnecessary burdens on business, but also burdens in the public sector and on citizens, which is where we have been going. Overall, the approach, which is to have a series of initiatives dealing with elements of that vision, is the correct one. So you have an approach that tackles the stock of existing administrative burdens; you have an approach to try and slow down or mitigate the flow of new burdens; and then you have issues such as common commencement dates, which are ways of making a reality of some of the simplification activities. Overall, it is right to have a series of initiatives. I do not think you can bite off a strategy as big as Better Regulation with one initiative. It seems to me they are coherent. I think the pace at which they have been coming has been great. It has been a challenge, but we have responded positively and effectively to that.

  Mr Podger: I generally agree with what Trevor has just said. It is quite right to have an over-arching goal for BRE in reducing unnecessary burdens on business and people—I do not think any of us could object to that. The key point though is how you do it, and what is appropriate will inevitably vary from one sector to another. That is why if one just has a one-size-fits-all approach, for example to try and regulate on the basis of a mathematical quantification of risk, which is something that sometimes occurs, that fails completely to take account of issues around public perception, issues around public expectation, which also have to be faced. I would just say that I think the over-arching goal is fine. I think it is perfectly proper for BRE to see to intervene in different ways in different sectors.

  Mr Wilmore: I support the fact that there is a clear vision. It is about Better Regulation, and in health and social care is very important to distinguish between Better Regulation than just cutting regulation. We envisage a strong role for regulation in health and social care to ensure people receive quality of service. Our experience of working with the BRE is that through the annual reduction targets and other initiatives, there is a clear framework in which there is an expectation the departments will work towards that—but we are not told how to do it, so we have a constructive dialogue about the areas we think we can reduce the regulatory burden; but equally we will come back sometimes and say that there are areas where we think we might need more regulation because there are new risks coming along. We have that dialogue on a constructive basis within the framework that we are trying to promote more risk-based approaches and a more proportionate approach to regulation.

  Q129  Dr Naysmith: The British Chamber of Commerce representative suggested to us that there should be a more robust approach to the policing of departments. That raises the question of what the BRE's role should be in relation to its various customers, clients and stakeholders. Should it be a policeman; a think-tank; a deliverer; a teacher, or any of these things: what should its role be? Should we agree with the British Chamber of Commerce?

  Mr Podger: From the Health and Safety Executive's perspective the one thing which is important is that we are an independent regulator accountable to a board, indeed a board created by this committee. I think it is their role to monitor us on a day-to-day basis. We make a huge amount of information public. We certainly provide a lot of information to BRE. We do not have any problems with occasional initiatives like the Hampton Compliance Review that they have just done. However, it is important that we preserve a structure whereby bodies are accountable to their own management and through them to Parliament and the public; not that they start an alternative line of accountability off to colleagues in BRE because I think that would only lead to confusion.

  Q130  Dr Naysmith: Should the BRE step more into the role of ideas generator now, instead of being a policeman and monitor; should it be generating ideas rather than policing?

  Mr Podger: Clearly, the RRAC is a young body so we do not know quite what it is going to do. I certainly agree that there is a role at the centre for—if I might put it this way—perking up ideas—which is not always easy for those of us who have operational commands to do on a day-by-day basis. I think that is certainly a part of the role. I think it should not just be drawing up, frankly, rather complex administrative issues.

  Mr Wilmore: I would support that in terms of balance being as much about a centre of excellence and learning from the experience of other centres. Inevitably, there has to be a method of monitoring and evaluating success, but I would not want to see that as a policeman role. After all, we are Departments in the same Government, working for shared objective, so we should be allowed to regulate our own effectively and be challenged on that. I think that is the right kind of balance. The specific comments from the Chamber of Commerce are probably more difficult for the Department of Health to respond to in the sense that we have minimal involvement only in one or two key areas with the commercial sector where we have already made quite good progress and have good working relationships, say, for example, with the pharmaceutical industry on regulatory initiatives. We feel that we can demonstrate progress in those areas anyway.

  Mr Gregg: I think it would be a mistake to force BRE into the role of enforcer. Their added value has come as facilitator because Better Regulation is not something that is being imposed on departments; it is a wish for departments to regulate in a better way to achieve their outcomes. The facilitation role is important; the visionary role, making sure that we share that vision is important. Some consistent monitoring around how departments are performing so that we can communicate our successes is absolutely vital to maintaining support. I think the annual publication exercise of the simplification plans, where departments are required to report on how they are going against the specific measurable targets and how we are achieving progress culturally in the way we think about the need for intervention and how to construct those.

  Mr Huddleston: One thing I found useful is related to the policeman role; it is essentially looking across all of the regulatory activity across departments, and identifying best practice where perhaps one department is a little ahead of another, and drawing that to your attention to say, "these have had success in this area; why do you not try that?" That has been quite useful to us particularly when we have been thinking about reconstituting our Better Regulation Stakeholder Group. That has been a positive aspect. I also think that across Government there is a broader mechanism for looking at performance in this area, which is of course public service agreements and the delivery board that oversees that. That is a useful mechanism in the round for saying, "Are we, as a community, making progress?"

  Q131  John Hemming: Within that context is it a better idea for the BRE to look at the individual impact assessments or more widely on how departments are handling things from the point of view of training et cetera?

  Mr Wilmore: I think the BRE's input in revising guidance and broad support on how to do good impact assessments has been very good because there is no point having a department reinventing a slightly different way of doing that; so I would support that; but beyond that I would not support the BRE scrutinising individual impact assessments. I think the departments should manage that and encourage them to promote the importance of that within their department; and that is a key part of the mechanism of challenging whether regulatory proceedings are adding value and not adding unnecessary burdens.

  Mr Podger: I take essentially the same view. I think it is very important that Better Regulation is embedded in all of us; it is not something that can just be enforced on a day-to-day basis by BRE, coming from the outside. Whilst I think it is quite right for them to pioneer and lead things off, I think it is perfectly proper that once they are bedded in it should be entrusted to departments to be accountable for them.

  Mr Huddleston: I agree with that. I think the consistency that the impact assessment approach gives is very useful and very welcome. The training supporting that was very effective. I do not think there is a great deal of mileage in the BRE actually scrutinising all the impact assessments. The role that Chief Economists have got within departments to sign off the quality of the analysis is sufficient internal policing: it gives you a commitment to rigour.

  Mr Gregg: I very much agree with Trevor's last point. It has been extremely valuable to have support on the training side in terms of getting the policy officials that are doing the work to think about impact assessments and what they really mean. In Defra we have put something like 600 of our policy staff through impact assessment training, and the process has proved to be a really useful culture-change tool. I do not think that scrutiny of individual impact assessments by BRE would add value especially given the Chief Economist's sign-off procedures; but I do think the establishment of the central repository to the impact assessment library is a useful step forward. It has only just started and there are very few impact assessments on there at the moment; but that will become a useful tool for departments and for businesses and the general public.

  Q132  John Hemming: Where would you put BRE now it has moved from the Cabinet Office? Does that help or hinder; is it a good idea or not such a good idea?

  Mr Gregg: It is a difficult one. Looking at it domestically, one has to think what sort of message are certain stakeholders taking from that, in a department where there is a voice for business: could one read it as BERR needed some reform more than the four Departments you see in front of us? I think it is useful from the context of BRE being closer within the Department to the realities of picking up on the challenge that collectively we set ourselves. Perhaps in relation to taking forward the European agenda, it might be more difficult for BRE, embedded within a delivery department, to establish a strategic relationship with key opinion-makers in Brussels. That is something that collectively we are working hard at to improve.

  Mr Huddleston: I certainly have not noticed any change in our relationship since the move to BERR took place on a day-to-day level. Things are progressing very well and effectively. We share the concern about perceptions. Is it the case that this could be seen as downplaying the importance of burdens on the public sector and citizens, which is the particular area the Department for Work and Pensions is interested in? I guess I would say that in the DWP we have so much internal commitment and so many drivers for those agenda anyway that the BRE is, if you like, more of a critical friend than somebody driving us along. However, I could imagine circumstances in the future where if BRE were a little less hot in that area, we would lose a little bit of clout in the Department potentially to help push this along. One of the roles that the BRE plays for us is that it makes everyone aware that this is an important agenda, and it helps us spread that message within the Department.

  Mr Podger: I think we, frankly, noticed very little difference since the move to BERR; in fact, it seems to have been a very smooth transition. From our particular perspective of the Health and Safety Executive it impacts most on the business community and rather less so on wider public issues. For that reason, we do not have the problem that other colleagues have drawn attention to. My own view is that it is also perfectly possible for BRE to exercise their European functions, to which we attach a great deal of importance, and within BERR there is a lot of activity going on there.

  Mr Wilmore: Likewise, we felt the transition was very seamless. We noticed no practical change in our working relationship with BRE since they became part of BERR. Again, the biggest risk for us is the perception of the Department largely in public services, that people will think the emphasis is predominantly around regulation of commercial and business sectors and it is less interested in public sector; but the reality of our experience is that that is the position BRE takes. It is equally interested in promoting Better Regulation in the business sector, so we need to do work to ensure that our key stakeholders understand that message, that we are not sidelining their interests.

  Q133  John Hemming: Does anyone have a strongly-held view as to whether HMRC should be brought within BRE's remit?

  Mr Podger: No.

  Q134  John Hemming: Is that "no"—any view at all? No comment?

  Mr Wilmore: Again as the Department of Health, we do little direct business with HMRC in terms of the sector we represent, so we have no direct experience, I am afraid.

  Q135  Chairman: Can we move on to your own work in the field of Better Regulation, specifically the Administration Burdens Reduction Programme? As, Mr Huddleston, your Department is perceived to create the greatest number of admin burdens, at least in the eyes of my constituents, I will start with you! Are you on target to meet your 25% admin burden reduction programme by 2010?

  Mr Huddleston: Yes, we are.

  Q136  Chairman: Why do you think there is not a perception that Better Regulation is genuinely reducing burdens? I deliberately frame that question in that way: all of us, as Members of Parliament, will see attempts that have been made to, for example, improve the design of DLA application or whatever; but none of us have seen the real re-engineering of business process that would radically change the volume of admin burden both for the department and for the client.

  Mr Huddleston: The first point I would make is that the Administrative Burdens Reduction Target we are referring to meeting is administrative burdens we place on business, which is largely via pension regulation and via statutory sick-pay regulation; so this, if you like, is the form-filling that accompanies policies to increase pensions saving. You are talking about the wider definition of burdens, which—

  Q137  Chairman: I just have a feeling it might be endemic in the Department.

  Mr Huddleston: It is certainly the case that the benefits system is a very, very complicated system, but we do have a range of activities going on in departments, a lot of them driven by our own self-interest to start to chip away at that burden. For instance, we have been simplifying our suite of leaflets to improve quality and consistency of the leaflets. We have been moving to more telephone-based claims, particularly for benefits for pensioners, which allow more benefits to be awarded in the course of a single telephone conversation. Then we have this very ambitious programme, which we call the "lean initiative" in the department, which is asking our front-line staff, who administer our processes, to take the process of, say, claiming benefit, apart, break it down into its constituent parts and work out which of those parts are actually needed. There is a very, very strong push within the Department to simplify both the benefits of our products and the way we deliver them. That is going to be a long-term ongoing activity. With reference to the Administrative Burdens Reduction Target, there we have made some progress in reducing some of the information obligations we place on pension schemes. We have done some work to deal with some complex statutory sick-pay issues and we have been doing some recent work to look at the employers' liability compulsory insurance issue with retention and display of certificates. In that sort of area, where we have a specific measurable target, I think we will achieve it.

  Mr Gregg: We certainly are on target. We have seen the 2007 Simplification Plan: Cutting Red Tape. The current estimate is 29% by our 2010 due date. In terms of the difference, perception is the biggest challenge that faces all of us. In looking at how we can take forward the agenda and how effective what we are doing has proved to be for our stakeholders, we do go out and consult. On a fairly small scale, in January we asked 15 representative organisations and sent a short questionnaire asking: "Do you know about this regulation; do you think Defra is doing okay at it; have you spotted any differences?" It was quite interesting that although we only had six responses, it was a very tight timetable. All six came up with, "Yes, we have noticed a difference" and they all came up with an example, and there were six different examples. They are not major in themselves, but in the numerous sectors that we deal with, those small differences are starting to build up. Things like an environmental permitting programme—the major simplifications that are engaged in there will take time to be really felt. It is only when you go out with specific examples to business and say, "Do you remember yesterday you used to have to do this; and today you have to do this" that you get a positive response. If you ask for a general feeling, then business memory is fairly short when it comes to improvements that Government is able to bring about because they face day-to-day pressures like all of us to find more.

  Q138  Chairman: I was impressed, Mr Gregg, with a process that your Department is responsible for on the Solway Firth that has very deeply brought together the environmental needs of your own Department and those of the DWP and HMRC in managing cockle-picking there, by introducing a very neat licensed bag in which people collect things. Is that kind of cross-departmental activity central to your thinking?

  Mr Gregg: It certainly is, particularly when faced with challenges like that, where you have a relatively new organisation, a licensing authority, but there are many players both in central departments and at the local authority level as well. An agenda like climate change is something where we do not have armies of people who can solve that particular problem; we are entirely reliant on co-operation, including with BERR on the energy front from other departments, but also in terms of the response from business and the general public. It is one of those areas where the non-regulatory response, the communication/education/persuasion route, stands to make nearly as many dividends for that agenda as the regulatory route; so this co-operation and working together is increasingly important.

  Q139  Chairman: The Minister told me the other day that the Dee Regulating Order, which has been long outstanding, will be coming shortly, and I look forward to efficient design on that as well!

  Mr Wilmore: We feel we have made good progress on the ABR Target; we are about half-way to meeting the 25% target and we are comfortable we will do that. Most of the gains to date have come through regulatory efficiency savings around the pharmaceuticals and medicines industry, and particularly the Better Regulation Medicines Initiative, which has involved a lot of joint working with the business community in the pharmaceutical industry to streamline and improve regulatory process such as online applications, simplification of medicines labelling procedures that allow companies to get medicines to market earlier and so on. That has had a lot of support and won an EU Cutting Red Tape award in 2007, so we are very confident that that programme will continue to deliver further reductions in regulatory burden as we start to look at how that applies to other areas such as prescribed medicines and generic medicines. The other main area that the Department has involving the business sector is around social care, and particularly in care homes for older people and other forms of adult social care, where we are starting a process of reviewing the national minimum standards and funding regulations that apply to social care providers, to simplify those and make them more outcome focused and less based on prescription and input. We expect to make significant savings by 2010 from that initiative as well.

  Mr Podger: Just to complete the picture, I ought to confirm that we are ourselves also on target in relation to the Administrative Burdens exercise. On a perception point, to follow on from what Richard was saying, I think it is an inherently difficult question to ask people, to say, "Have you noticed the difference?" for the simple reason that people will notice it differentially in different sectors; and, second, inevitably, as happens to all of us, as soon as one thing takes slightly less time each day something else takes more; and therefore people do not find themselves with spare time on their hands as a result of these initiatives. That does not mean to say these initiatives do not have considerable impact. I think they do. Our own experience within the Health and Safety Executive is that people who have got to deal with us are generally quite appreciative both of need for the regulation, but also the manner in which we enforce it. I think problems become greater in terms of wider public misunderstanding of the so-called "health and safety" problem but that goes well beyond what the Health and Safety Executive itself is responsible for.

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