Select Committee on Regulatory Reform Minutes of Evidence

Examination of Witnesses (Questions 181-199)


20 MAY 2008

  Q181 Chairman: Could I welcome the Local Authorities Co-ordinators of Regulatory Services to this session and ask you what feedback you have had from councils on what it is like to work with the BRE? Does the BRE talk to and consult with local government sufficiently? Is it organised in a way that is helpful to your members? Does it have the right people for that?

  Councillor Sutton: Perhaps I could deal with my experience as a local authority leader with the BRE, and where they are on the radar with my colleagues around the country. It is my experience that they are not high profile at that level. There is a difference with the relationship, with the central body of LACORS and the Local Government Association very much at the technical level, but at the political leadership level they do not seem to be of a high profile. One of the issues, we feel, is that they are quite a process-oriented organisation. There may well be some language differences, with the new way that we are moving forward with local government, when we are moving from the CPA system to comprehensive area assessments and going away from this process of performance indicators to measuring real outcomes for the communities that we are elected to serve. As you will be aware, we are moving from 1,200 performance indicators to 198 community outcomes. I do not think the language is there from the organisation, the BRE, that is reflecting the way that CLG are moving, and the central local partnership at the LGA is talking with ministers to take the agenda forward. It may well be it is a language thing. It may well be that the BRE would need to look at what the 198 indicator sets are, although they have five proposed in the 198. But of course the way that the relationship with central government is going with local authorities, it will be down to those local authorities to pick out 35 from those 198 indicator sets, via their Local Area Agreement, agree them with government, and take that forward. Whether the five from the BRE get into those 35 would be down to the way they are communicated. There is a very, very healthy relationship at the technical level with our senior directors within the LGA and LACORS, and they do consult, but it is a constant battle with the language.

  Q182  Chairman: Coming back to my third question, does it have the right people for that, is the language difficulty perhaps related to the absence of the right people?

  Ms Martin: It is quite difficult to judge around people. I think there is a lack of understanding around how local authorities work at the ground level and what they need to do for their communities, and particularly the regulatory agenda: how one needs to deal with issues that happen in the locality. But reinforcing Councillor Sutton's point, at the engagement level it is very, very good. The BRE are almost in daily contact with LACORS and the Local Government Associations about what they are doing and wanting to talk to us and wanting to consult with us, so at that level the relationship goes very well.

  Councillor Evans: I think, in fact, that is key to the relationship: the good working existence that there is between us as deliverers, if you like, on the one hand, and themselves in taking that forward. We need a bit of pragmatism. We need to be delivering at the end. They seem to be acting more like a think tank, if you like, in terms of taking things through, whereas we, as local authorities, are wanting to be there to be able to enforce and to have the grounding in terms of the deliverables of such actions. We deal with things at the coal face. Whether it is animal health or death or injury at work, et cetera, we are involved more in the practicalities of dealing with those kinds of issues.

  Q183  Chairman: Let us follow up on that last comment. Have you been involved in the review of health and safety burdens specifically for SMEs? Have you been involved in that? If so, perhaps you could tell us a bit more about it.

  Ms Martin: LACORS has been. The Executive Director of LACORS has been on the steering group. It is not personally within my remit but colleagues that work on health and safety have been very actively involved with the BRE throughout that project. Again, the engagement has worked very, very well throughout the project. I think there have been some concerns that occurred in the last couple of days. In the draft report, which I have not seen but my colleagues have seen, some of the recommendations appear not to have been discussed by the steering group. I know that has caused some concerns with both the Health and Safety Executive and LACORS but is being followed up with the BRE. But on the process itself, again very active engagement from the inception of the work, and it just seems to be that at this very last point there have been some sticking points about drafting and certain recommendations. Other than that, it has worked very well.

  Q184  Dr Naysmith: Do you think the BRE has a coherent strategy and a firm grip on its own objectives? The reason I ask that question is that in the LACORS' memorandum there was a suggestion that there is some overlap between BRE's overarching strategy to deliver better regulation and the number of individual regulatory reviews that are going on at the same time. Does it have a clear grip on its own strategy to deliver the best possible regulation?

  Councillor Evans: The objective of reducing the administrative burden is well understood by all concerned and we certainly are well aware, going forward, of the simplification plans in terms of reducing those burdens. The issue for us really at this stage is that what is being delivered in terms of outcomes. At the moment we get limited outcomes from those simplifications. It seems to be that it is not getting through the cut and thrust of what needs to be done in terms of seeing the outcome at the end of it. Perhaps we do not fully understand yet how long it will take for these issues to come to the simplification. Currently, it does not seem to me that we are getting to them.

  Q185  Dr Naysmith: What do you think it could do better that it is not doing at the moment?

  Councillor Evans: It depends how much time it will take to go through the processes to make matters more simplified. That seems to be a very long journey to get to the delivery end at this time. Certainly the activities do seem a bit incoherent in terms of the overall strategy. For example, last week, part of BERR issued a consumer law review. That in itself was quite confusing: part of it was focusing on simplification of legislation, which is in line, of course, with what was being instigated officially, but at the end of the day part of it is also reviewing the enforcement regime. This runs against what the LBRO is assumed to be doing. There seems to us to be confusion around that one. I do not know if colleagues would like to add to that.

  Q186  Dr Naysmith: It is not necessary for everybody to speak on every topic, but if you have something to add that would be great.

  Councillor Sutton: I think that is fine.

  Q187  Dr Naysmith: I will switch to my next question. You know that the BRE has moved from the Cabinet Office to BERR. Do you think that is the right place for it? Is the move a good one? If not, where do you think the BRE should be located?

  Councillor Sutton: For me, the important factor is the outcome. I think there is a sense of feeling that as it has moved form the Cabinet Office it may have lost some of its perceived influence across all the government spending departments and the issue is are they being effective as legislation is being developed, are they being put in at the right level. There are anecdotal issues, if we are talking about CLG, where the BRE have done some development work which has been completely opposed to some of the outcome that CLG want. If this is having an effect in other government spending departments, are they best suited where they are? That is probably an internal question for you. I think there is a perception issue for local authorities, how important are BRE looking in to central government. Why have they moved? Is it the perception that sat in the Cabinet Office they were much more influential?

  Q188  Dr Naysmith: Do you think that perception is shared widely, that being in the Cabinet Office was more influential than in BERR?

  Councillor Sutton: Amongst local authority leaders that would have a resonance, yes.

  Q189  Dr Naysmith: But no real evidence that there is a difference.

  Councillor Sutton: Speaking to senior directors in the LGA and at LACORS, there are tranches of work that do go on, and they go to some of the government spending departments which just send them back and say, "This is not the direction we want to be going." If we go back to the move from performance indicators to outcomes, I think there is some confusion there with the role of the BRE with LBRO as well, but I would imagine you are going to ask about that later on. It is a matter for you, I would say.

  Q190  Dr Naysmith: You have thrown it back in our court.

  Councillor Sutton: Yes, but from outside looking in there is the perception that if something is sat at the corporate centre it is perhaps listened to a lot more. Is that having a real effect on other government spending departments in the way they want to change regulation?

  Q191  Judy Mallaber: We have been receiving evidence that the BRE puts too much emphasis on deregulation and satisfying the business sector, and not enough on consumers and users, for example. Your submission talks about the balance between the two and others have been saying that the balance has gone too far in one direction. Could you give us your various perspectives on that issue.

  Councillor Sutton: We feel generally that there is an assumption, when it comes to regulation, that SMEs need more hand-holding and more legislation than some of the very large multinational companies. The realities are that even the big multinationals in local authority areas do make some big mistakes around consumer protection and health and safety, and perhaps that is where the focus should be. Some of the big multinationals of course have made successful lobbying through the Lords as some of this legislation went through. Perhaps some of the focus has shifted to SMEs but then there are instances we can give outside of the Committee, to Committee members, of some big multinationals making some big health and safety mistakes and some big consumer mistakes within local authority areas. The focus needs to be against the big multinationals and SMEs as well. There is also this thing about regulators, "them and us" in local authorities, being seen as inspectors, whereas our role is probably more on the advice side at a very local level to fledgling companies, to even multinationals operating in our areas, a supporting role and an advice role.

  Councillor Evans: We cannot really overemphasise that point, that we are there to help the small businesses as well in our communities to understand legislation and understand what they need to be looking at.

  Q192  Judy Mallaber: Local authorities still have regulatory and inspection functions and trading standards are very important. There have been areas in my neck of the woods where I have felt that sometimes there has not been enough regulation, particularly around meat hygiene. There was a national scandal that we had which caused huge costs for the authority. Where do you feel pressure from the BRE is coming on that side of the equation? While you have said there are mistakes of companies, I am not clear whether you feel they are getting the right balance in terms of the emphasis on helping businesses or whether they have the balance right between that and the needs of, say, consumers, the environment, et cetera. Is there a LACORS view on where we are at the moment?

  Ms Martin: The worry is that there seems to be quite a simplistic view in some of the discussions, so that you have big business in one area, where all is fine and everything is wonderful, and you have rogue traders somewhere else. The classics being people who sell counterfeit goods, doorstep traders or things like that. In fact there is quite a lot of grey area in the middle, not just around individual businesses but certain very reputable businesses who make active choices to do certain things. Recently we have had a couple of examples that are not local authority enforced but relate to consumer legislation, if we look at what the OFT has done with high street banks, where they have not really been putting the interests of consumers at the top of the agenda over things like charging and that is going through the courts at the moment. Also the recent findings on big construction companies that have colluded to break the law in and around price fixing and tendering for local authority contracts. It is just a slight worry for us that it is seen as very, very black and white: you have good traders and you have rogue traders and all the activity should be on those identifiable rogue traders. Our view is that local authorities do apply risk and they do use intelligence around where the failings are, whether that is in health and hygiene or in consumer issues. There is a worry that the balance tips too far in assuming that you do not need any focus on those which are generally seen as good big business because they will just look after themselves and do everything right, whereas there does need to be that safety net public enforcement role to help if they need it but, also, so that if things do go wrong they are appropriately dealt with.

  Councillor Evans: Risk management is key these days to local authority works. We have to assess the situation at the local level, though we are well aware of what is happening at the national level as well through bodies like LACORS.

  Q193  Gordon Banks: I am interested in the idea of enforcing and also trying to work with small businesses. I run a small business. I started before I came into Parliament. Do you think the BRE make it easier or harder for you to do that?

  Councillor Evans: I think it is early days yet to identify the outcome of that. It is meant to be simplifying things. Time will tell whether that is the case or whether it is going to frustrate even more small businesses. I also run a small business and the bureaucracy involved in all that, the red tape, is something that gets small businesses down.

  Q194  Gordon Banks: If you find that you have a barrier because of something to do with the BRE, do you think that erodes that business's confidence in you as a potential partner to work with in a whole lot of other issues as well, so that it has a knock-on effect other than just in the area that may be involved in the BRE?

  Councillor Evans: No, I do not think so. Local authorities at the local level have expertise in dealing with small embryonic companies and they are able to play the two roles simultaneously, if you like: they can be the heavy hand or they can be the holding hand. I think it is very important for small businesses that that role continues.

  Q195  John Hemming: Obviously the retail enforcement pilot is very much a local government thing. You have said it is too prescriptive. What do you mean by too prescriptive?

  Ms Martin: We always felt the principles behind the retail enforcement pilot were very good. But from the outset it was too prescriptive,—and this was before the time it was a BRE-sponsored project, in effect, because retail enforcement pilot moved homes and on a number of occasions—

  Q196  John Hemming: Where did it leave homes from and to?

  Ms Martin: It started at the DTI, then, when the BRE became part of BERR, the BRE took responsibility, and I understand it may then be moving to the LBRO from September time. I do not think that is completely agreed yet.

  Q197  John Hemming: So it was not with the BRE before they were BERR.

  Ms Martin: No. It was started by the DTI and a lot of work was done there. The fear we always had was that it was focused completely on dealing with routine planned inspections at a time when they were reducing anyway. An awful lot of routine planned inspections that were done, particularly in relation to trading standards and food, were done to meet the previous performance indicator regime, where actually the DTI had indicators that measured how good a trading standards authority was by the number of inspections it did. The Food Standards Agency did the same—in fact, it still does, but to a lesser degree. It was very difficult, therefore, for the pilot to measure outcomes because it was on shifting sands, in effect. It was a pilot about reducing inspections at the time inspections were reducing anyway. It has worked very well in some areas. We have had very good feedback in some of the pilot areas, but we also know some other areas were unable to participate because they wanted to do something slightly different. In one area in Wales there was a desire to run the pilot but without the fire authorities, because the fire authorities could not commit resource to it. Because it did not fit into the framework of retail enforcement pilot they were not allowed to try it out. We felt that would have been a valuable trial area. There have been some other places in the East Anglia area where they have wanted to do it, based more on data exchange rather than a focus on planned inspections, and, again, it did not fit the quite strict frameworks.

  Q198  John Hemming: You are saying they over-regulated the deregulation.

  Ms Martin: Yes. It is too early. Phase 2 has always been the phase where one needed to measure properly the cost-benefits, not only to business but, from our perspective, to local authorities. If it were to cost local government far more to manage the process than it was getting out of the savings at the other end, there would be question marks about how it could be rolled out. We are looking forward to that evaluation, which will be at the end of this calendar year.

  Q199  John Hemming: At the moment you are not sure as to what the cost benefit is for local government. One of the estimates is about £10 million saved for business. Is that fair, indifferent, high, low?

  Ms Martin: To be honest, I would probably have to follow that up with some written answers. I could not comment on the details of how those figures have been arrived at.

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