Supplementary memorandum submitted by
the Environment Agency
INTRODUCTION
1. This is supplementary evidence about the
balance of the Better Regulation Executive's (BRE) regulatory
reform strategy in response to questions 181 and 182 from our
oral evidence session on 20 May 2008.
BALANCE OF
THE REGULATORY
REFORM AGENDA
2. We have a statutory duty to deliver environmental
outcomes without causing unnecessary economic or social cost.
It is important that the better regulation agenda strikes the
right balance between effective regulatory outcomes, reducing
unnecessary burdens on business and retaining public confidence
in the effectiveness of the regulatory system.
2.1 We think that the BRE's current agenda fails
to strike the right balance. For example:
2.1.1 BRE's communications sometimes suggest
that regulation and regulators are bad for business, for instance
in their recent communications on the Regulators" Compliance
Code.
2.1.2 Although we recognise the importance of
minimising administrative burdens, recent proposals on regulatory
budgets focus on costs alone and do not take into account the
benefits of regulation. This ignores the fact that regulation
can be the most effective option to deliver important outcomes.
2.1.3 The emphasis on cutting costs distracts
from the importance of a more consolidated framework for legislation,
such as single-environmental permits. This is what businesses
tell us that they want.
2.1.4 The regulatory section of the recent Enterprise
Strategy contains ideas which will need very careful evaluation
if they are not to risk discrediting the better regulation agenda.
One of the Hampton principles is that regulation should be based
on risk and not on the size of businesses. However, the Enterprise
Strategy proposes exempting small business from regulation despite
the fact some pose a high risk and can have a significant impact
on the environment. For example they are responsible for over
60% of all commercial and industrial waste and for 40% of pollution
incidents in 2006.
2.1.5 The BRE seems to adopt a "one-size-fits-all"
approach to regulators, failing to recognise the very different
regulatory approaches and risks that we are managing on behalf
of government. For example:
— There is a failure to recognise that
regulators are at different stages in delivering the better regulation
agenda. We are disappointed that the BRE's communications to business
do not recognise the good progress that some regulators, such
as ourselves, have made. Their communications tend to convey the
message that "all regulators are bad" which undermines
both the public and business confidence in regulation.
— In the Enterprise Strategy, the BRE
propose a one-size-fits-all approach, rather than an approach
based on risk. This is likely to raise false expectations among
businesses.
— The BRE seem to be struggling with
the fact that regulators are different for example in terms of
their relationship with local authorities. We do not devolve delivery
to local authorities and yet we are named on the face of the Regulatory
Enforcement & Sanctions Bill as being required to have a memorandum
of understanding with LBRO.
— We have a permit-based system which
is fundamentally different to other regulators. This is a European
wide approach. The majority of our funding for regulations comes
from, and must be spent on, those we permit. Despite this, the
BRE have raised expectations around the level of tailored advice
and guidance that we can provide, including to those we do not
permit.
— Through their one-size-fits-all approach,
the BRE have also called for us to inspect less. However, we know
businesses recognise inspections are important. We often provide
advice during our inspection visits. During the recent review
of regulators carried out by the NAO and the BRE, the review team
spoke to business representatives, owners and managers. The findings
have not yet been published but we understand that a key message
was that inspections can be welcomed, particularly by small business,
as a means of providing reassurance and access to tailored advice
and guidance.
2.1.6 In their quest to reduce burdens on business,
the BRE are imposing greater burdens on the regulators, much of
which in the end falls back onto business. The restrictions around
access to Macrory sanctions, the recent Hampton Implementation
Reviews and possible follow ups, proposals to introduce regulatory
budgets on top of simplification plans, and Part 4 of the Regulatory
Enforcement and Sanctions Bill all add to our cost base.
June 2008
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