Examination of Witnesses (Questions 260-279)
BARONESS VADERA,
SIR WILLIAM
SARGENT AND
MR JITINDER
KOHLI
24 JUNE 2008
Q260 Dr Naysmith: When we had the
TUC here giving evidence they suggested that there was a need
for a think-tank on regulation and they regretted the loss of
the Better Regulation Commission. Do you think they are wrong
about that? Do you think that there is enough of a think-tank
presence there for it not to be required?
Baroness Vadera: I would be very
happy to talk to the TUC to see what they thought was missing
and make sure that we covered that, but I believe that we do have
that ability to think strategically, as you can see from the enterprise
strategy and things that we have brought forward in the most recent
round on initiatives to improve on regulatory reform. I think
we certainly have the ability to do that think-tank work, but
I would be very happy to speak to the TUC to make sure that they
feel comfortable that we are not missing out something.
Q261 Dr Naysmith: We also heard something
similar when we were in Holland. They have an organisation called
Actal, which has an independent function as well. From the business
side, they were suggesting—
Baroness Vadera: Actal obviously
is not the think-tank; Actal is just the monitoring function for
a narrow piece of work, which is the admin burdens verification.
Q262 Gordon Banks: In evidence that
we have taken the IoD has suggested that a real focus in Civil
Service career paths should be on the experience within the effective
use of regulation and the usage of legislative solutions. So do
you think that the Civil Service training promotion sufficiently
acknowledge the value of experience in promoting Better Regulation,
as well as the more traditional area of working on Bills, et cetera?
So how focused is that?
Baroness Vadera: I am just smiling
because I have had this discussion with the IoD and Miles Templeman
for a long time—we have actually been bouncing ideas off
each other because we have come to the collective conclusion that
one of the things that we need to deal with is culture and change
of culture across Whitehall, so Miles and I have had so many discussions
around the subject. I think that it is fair to say that I think
there has been a radical change in the culture, but I think that
we have a long way to go still. Some of that is around training
but I think some of it is also around the incentivisation—that
people feel a sense of ownership of the Better Regulation Agenda
that they did not before, and they feel that they will be rewarded
for that in a way that perhaps they did not have before because
there was a sense before that to get around the system you only
needed to be doing a big Bill. But now it is slightly different;
it is about looking at the overall competitiveness and improving
both business and public sector and the third sector functioning
more effectively. But I do think that we have a long way to go
and I think that some of it is still around the incentivisation
issues. But there are training courses; William, do you want to
go through all the training courses?
Sir William Sargent: To give you
an example, about 35 of the courses at the National School of
Government have better regulation, elements within them, which
is something that people go through, right through to top management
programmes and right through from the basic day to day policy
making type courses through to the ones which are intended for
the leadership of the Civil Service going forward. We ourselves
as the BRE, for example, when a new form of impact assessment
came forward last summer we ran quite a comprehensive number of
training courses across government and within departments themselves
it is quite common for them to have courses which are very specifically
addressed to better regulation. If you go back a number of years
this would not have been in there. So there is quite a comprehensive
dotting throughout, and with that I am particularly pleased that
it is right up to the top level, right up to the senior level.
Q263 Mr Davies: May I just ask a
very brief supplementary on that? On the matter of incentivisation,
what you are describing is more training of people, giving them
information about the importance of better regulation. Incentivisation
would be something different; it would be giving individuals a
personal interest and making it clear that promotion is dependent
upon progress in this area, for example. Then there is the issue
of institutional incentivisation: that is to say, whether the
actual department has an interest. For example, you might say
in so far as they can make bureaucratic savings by deregulating
or better regulating they could keep a portion of these as an
allocation to their own budget. Have you thought about going along
these roads of individual incentivisation and institutional incentivisation
because obviously they are much more powerful than simply giving
people training courses?
Baroness Vadera: I think that
they are much more powerful. I would obviously encourage you to
encourage Sir Gus O'Donnell to think about how he incentivises
the Civil Service, but we have talked about this incentivisation
before and he has certainly taken some of that on board, and I
think that we could do more of it. Institutional incentivisation,
obviously the Treasury has historically also looked at, for example,
efficiency savings that come from the public sector, because the
public sector regulation brings in quite an important element
of competitiveness, and how the savings are shared, and people
are incentivised to certainly deliver on that. I think that regulatory
budgets will create a different incentive structure as well.
Chairman: Which is precisely where we
are going to go.
Q264 Gordon Banks: Just to sum up
what you have just said there, that the basis of that change has
occurred it will take a long time for that change to become embedded
and entrenched to the level that we would all wish it to be, would
that be right?
Baroness Vadera: I think you can
never really get to where you want to be because it is always
a work in progress, and I think we should be encouraging, in particular,
the senior Civil Service to be looking at this further.
Q265 Gordon Banks: Doug mentioned
Actal in the Netherlands. The World Bank and the OECD have stressed
the importance of independent monitoring of progress, and I was
wondering whether you feel that there is a need for something
like Actal to actually corroborate the figures on both regulatory
budgets and impact assessments, or can we cope without?
Baroness Vadera: I think that
we have actually a different system and we have a very open system,
so all of the impact assessments which have now been reformed
again, which William is just pointing out to me, it is all available
on one page and it is very easy to look at and see and they are
all published. So actually they are open for scrutiny in a wider
way. They are open to scrutiny from business and they are obviously
open to scrutiny from this Committee, which would be a welcome
and valuable thing; and also the BRE scrutinises it. I think the
BRE has some advantages of being authoritative and expert but
a little bit inside the tent so that people feel comfortable in
having the discussion with them. So I think we have the balance
about right and because of the level of transparency I think we
do have quite a lot of independent scrutiny.
Q266 Phil Wilson: There seems to
be a perception that the BRE is concerned principally with business
interests. In the Environment Agency's oral evidence session,
Mr Mitchell from that organisation said: "I get the sense
that the BRE accepts the word of the business community without
much analysis." What is the government actually doing to
try to counter that perception? And do you think that business
has seized the agenda at the expense of proper protection for
consumers?
Baroness Vadera: No, I would not
accept that view, although I can see how somebody from the regulator
might think that. The reason I do not accept that view is because
if you look at the way in which government makes decisions, policy
decisions are made—not in the Environment Agency but made
by Defra on that particular issue—collectively within government,
so that we all have to sign off obviously it is made in a collective
way with people representing different views and coming to a collective
decision. The job of the BRE then is to look at whether this regulation
proposal that might come out of that collective decision—which
is where the consumer protection and environmental protection
issues come in—are done in a proportionate way, being implemented
in a proportionate way for impact in business in the third sector—and
in the public sector as well, because it affects all three—but
it is about the way in which government makes decisions that it
might appear that way because actually the BRE's job is to ensure
that the policy once decided is proportionate and is going to
be implemented in the best way in terms of the principles of better
regulation.
Q267 Phil Wilson: That probably could
happen, as you say, in government, but why is there still a perception
that the BRE is primarily concerned with business interests?
Baroness Vadera: There might be
that perception. I would not claim that the BRE—no disrespect—is
the most popular entity, but its job is to say, "But you
have not thought this through properly." So somebody who
is just focused on one thing, for it to bring another alternative
view might make it appear that actually you are just thinking
about the one thing, you are not thinking of the environment,
but that is the way which we make collectively our decision and
it is the BRE's job to be concerned to ensure that it is proportionate,
which is not to say that the job is to say consumers should not
be protected or the environment should not be protected at all—that
is not its job.
Q268 Chairman: Before we move on,
can we take one step back to the proposed regulatory budgets.
How do you see these budgets working and who is going to monitor
compliance?
Baroness Vadera: We have obviously
not made a final decision, so I can give you some views we are
going to consult and I would not want to pre-empt anything that
comes out of the consultation process. We are trying to see if
we can emulate—and again it is a world first, nobody has
quite done it before so I cannot quote any immediate precedents—something
as close as possible to, say, the Comprehensive Spending Review
where there is a budget that is allocated and that people have
a responsibility to live within it, and if they overstep the mark
then we have to look at what sanction is available. It is more
difficult to do it for regulation than it is to do it for funding
because it is, by definition, more finite. So we will have to
look and see how we actually monitor and ensure that people stay
within the budgets.
Q269 Mr Prisk: Minister, can I turn
to the Administrative Burdens Reduction Programme? How committed
is the government to this? After all, looking at your own statistics
the latest figures show that your own department has only achieved
a 1% reduction and the Treasury has shown a 7% increase in the
period as shown in your most recent publication. How committed
are you to this?
Baroness Vadera: I would say very
committed because this really has been our flagship project in
terms of delivering results on the ground. I would also say that
there has been £800 million so far that has been delivered.
Q270 Mr Prisk: In percentage terms
how much is that?
Baroness Vadera: Six.
Q271 Mr Prisk: Out of?
Mr Kohli: Six per cent out of
25.
Baroness Vadera: Because it is
quite easy to get the lower hanging fruit and so on and then need
procedural and process changes or IT changes in particular, it
is true that by definition some of that has back-loaded towards
the end of the programme. That is in the nature of the things
that you have to change in order to achieve it. So I am confident
that we will get there. I am actually talking about buy-in, and
going back to earlier questions I think that there is a huge amount
of buy-in across Whitehall on this—there really is—because
of the way that government works in terms of incentivisation—"Here
is the target, you have to do it." And if it is there in
the process then they achieve it.
Q272 Mr Prisk: I think that enthusiasm
is encouraging. Can you tell me, Minister, I think the correction
to the original document says that by now, this year, 2008-09,
there should be an 18.7% reduction, can you just confirm that
that is where we are at? Has that been achieved?
Baroness Vadera: I cannot actually.
Mr Kohli: The way we do the work—and
we would welcome suggestions on this—is that at one point
in the year we take a snapshot of how much progress each department
has made. In autumn last year, December 11 when we published our
document, that number was 6% across government and the table you
have in front of you sets out what it was for each department.
We will publish an equivalent table on roughly the same date this
year and we have not done the work on that yet.
Q273 Mr Prisk: So you do not know
if you are anywhere near 18 yet?
Mr Kohli: Let me just check the
numbers, but we will not know whether we are near 18; 18 does
not sound to me like the right number, but I will double-check.
Baroness Vadera: I thought it
was more back-loaded than that. But obviously the BRE have discussions
regularly with departments that they feel that they are on track.
Q274 Mr Prisk: You mentioned buy-in
and that leads me on to the question in terms of the back-loaded
nature of the programme. One of the issues here—and you
have said that Whitehall has bought into this, and I understand
that that certainly would be your hope—is the question is
whether business has, and there is a lot of scepticism that there
has been some progress in some departments, but obviously BERR
itself has only achieved 1% there in its first full year. Given
that the programme has some difficulties—you say there is
some hope that it will be back-loaded—why should business
believe that actually you will hit that target? What is the clincher
that you can say directly to a small business, "And this
is why we will achieve the target we have set ourselves"?
Baroness Vadera: I am a great
believer in actually delivery will be in the end the only way
to show something. I would say two things. One of them is that
for the first time—I have been working on better regulation
on and off in government for a number of years—in the last
month I have been to two or three meetings with small businesses
where actually they have come and said, "Now that you mention
it, yes, there is a difference." And it is quite interesting
to me that you actually have to mention, "Have you noticed
that you can do such and such?—"Oh, yes, I did notice
that. Yes, I can do my planning application now within a matter
of hours as opposed to days." It is just something about
the nature of regulation where people absorb it differently and
do not notice so much, and I think there is a communication issue
that you are pointing to, which is quite important, quite interesting
that we get right. But at the end we just have to deliver; they
will notice whether we deliver. But there are already things that
they are starting to deliver.
Q275 Mr Prisk: Moving on to some
other questions. Data reduction, the target of 30% is one with
which we are familiar. By my reckoning of the figures as published,
certainly in your own publication, my understanding from this
is that there should be roughly £700 million of data reduction
savings to date. What is the figure?
Mr Kohli: There are different
ways of measuring public sector reductions. What that is saying
is that in relation to all measures which help the public sector
there are £700 million of savings to date. You can also make
a count of the number of instances where departments require frontline
public sector workers to give information to the centre, and that
count was conducted in the autumn of last year and came up with
the number of about 800. The government is committing itself to
reducing that number by 30% by April 2010, which is over a much
shorter period than the admin burden.
Baroness Vadera: It is the number
of times that people go back for information; the 30% applies
to that.
Q276 Mr Prisk: Public savings, it
says here, very briefly, Chairman, is 921 by this financial year—921
by now. Are we on course?
Mr Kohli: I think the answer is
the same as the one I gave earlier, which is that we do that snapshot
check once a year. We are in continued dialogue with the department
to see if anything looks off track; so in relation to BERR, to
which you referred earlier, because BERR's numbers are low we
have been talking to BERR ever since December to make sure that
they will reach what they will need to reach in order to deliver
those 25% targets.
Q277 Mr Prisk: The Minister who is
the Minister for that department would have heard you!
Baroness Vadera: Can I just say
that I have had meetings with BERR; I have had meetings with the
other side of the department to check, on why we are where we
are, and what we have to do to get there and how much work we
have to do.
Q278 Mr Prisk: So you are going to
crack the whip, are you, Minister?
Baroness Vadera: I think they
probably feel I have done that already!
Sir William Sargent: Can I just
clarify, when you are talking about the public sector, those are—
Baroness Vadera: Yes, those are
different things. I am talking about the admin burdens.
Q279 Judy Mallaber: Following on
from the question of perceptions of business, how far do the initiatives
that have been taken come from departments or the BRE and how
far do they come from business? And is there any attraction in—I
think it was the Swedish idea—that we should not just be
looking at burdens that have a financial cost that you can identify—although
obviously you do want to identify that—but we should also
look at things that are irritating factors that drive businesses
mad. How do you relate to that and do you take your lead from
business or very much from departments seeing what might be possible?
Baroness Vadera: I think that
you have to start with the burden on business or the third sector
or whatever it might be; you have to start from what is their
feeling. The simplification plans were very much both people in
departments going through and identifying what they thought was
not necessary to them in policy terms or what could be reduced
in terms of procedures and forms, et cetera, but there was an
also an exercise of consultation with businesses during simplification
plans which actually tried to identify what businesses felt most
strongly about. We also research and work through quite a lot
of what the particular areas that businesses are concerned about,
both in terms of the overall impact, whether it is employment
or health and safety, within that what elements are creating the
most problems. So we have to do it from both angles. I think the
irritant issue is very interesting and I am sure at some point
somebody will want to ask me about HMRC so I may as well talk
about HMRC. HMRC, for example, very much took the approach of
identifying the irritants as well as perceptual issues in a way
that was responding to what businesses were telling them, and
they have a special group of businesses with whom they consult—because
of confidentiality reasons they work with them—and identify
those irritants. I think it is important both to look at the overall
burden and to look at the irritants because there could be certain
sectors in particular who have a very heavy burden, but if you
spread the cost across the whole of the economy you would not
find that to be significant.
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