Memorandum to the House of Commons Regulatory Reform Committee

 

 

 

 

The Government's Regulatory Reform Agenda

 

 

 

 

 

Submitted by the Minister of State, Department for Business, Enterprise and Regulatory Reform


Index

 

1. Executive Summary...................................................................................... 3

2. Initiatives Underway...................................................................................... 6

2.1. Reducing the burdens of existing regulations....................................... 6

Private Sector............................................................................................... 6

Third Sector (Charities and voluntary organisations)........................... 9

Public Sector.............................................................................................. 10

2.2. Achieving effective new regulations..................................................... 12

The Impact Assessment process............................................................ 12

2.3. Ensuring inspection and enforcement is proportionate and risk-based and improving the performance of regulators....................................................................... 13

Hampton Review....................................................................................... 13

Review of Independent Regulators....................................................... 14

Priorities for Local Authorities................................................................. 14

Retail Enforcement Pilot.......................................................................... 15

2.4. Improving transparency and communication of regulatory changes 16

Common Commencement Dates.......................................................... 16

The www.BetterRegulation.gov.uk website........................................... 16

2.5. Better Regulation in Europe................................................................... 17

3. Better Regulation Executive Budget........................................................ 18

3.1. Operational Costs..................................................................................... 18

3.2. Administrative Burdens Measurement Exercise................................. 18

3.3. Other Stakeholders................................................................................... 18

4. Performance Monitoring and Evaluation................................................ 20

4.1. Current BERR SR04 Public Service Agreement (PSA).................... 20

(i) Reducing the overall Administrative Burden.......................... 20

(ii) Maintaining the UK's International standing on better regulation 20

(iii) Improving business perception of regulation.......................... 21

4.2. Focus Group Research on the Perceptions of Regulation............... 22

4.3. Independent assessment of Regulatory Impact Assessments (RIAs) and new Impact Assessments (IAs).................................................................................... 23

5. Consultation and Co-ordination of regulatory reform........................... 24

5.1. A cross-Government goal, listening to and responding to those being regulated 24

5.2. Examples.................................................................................................... 24

Consumer information:............................................................................ 24

Regulation and Business Advice........................................................... 25

Health and Safety Review....................................................................... 26

Consumer Protection Regime................................................................ 27

Review of Consultation............................................................................ 27

Better Regulation Executive Visits Programme................................... 28

www.BetterRegulation.gov.uk Website................................................. 28

6. Future strategy.............................................................................................. 29


1. Executive Summary

 

1.1. Effective and well-focused regulation can play a vital role in correcting market failures, promoting fairness and increasing competition. Society expects the Government to provide protection for the general public, consumers and employees consistent with the best international standards.

 

1.2. However, inefficient regulation can impose significant burdens on the private, public and third sectors, and this affects our national competitiveness and the quality of public services. The Government's regulatory reform agenda is therefore focused on delivering better regulatory outcomes while driving down unnecessary burdens. This is achieved by:

 

* reducing the burdens of existing regulations;

 

* achieving effective new regulations;

 

* ensuring inspection and enforcement is proportionate and risk-based;

 

* improving transparency and communication of regulatory changes; and

 

* working with the European Commission, European Parliament and other Member States to address the quality of the stock and the flow of European legislation.

 

1.3. Significant progress has been made across all these areas. The Government's ambitious and wide-ranging regulatory reform agenda is one of the most respected programmes in the world, confirmed by international surveys. Major regulatory improvements include:

 

* Committing to reducing administrative burdens on the private and third sectors by a net 25% by 2010. Simplification plans published in December 2007 show that Government departments have identified annual savings of 3.5bn by 2010, with 800m of savings already delivered. Actions that will make a real difference to business and charities on the ground include the removal of the need for private companies to hold an AGM, a faster process for planning consents, and a halving of the number of health and safety forms employers have to complete.

 

* To address complaints from front-line public sector workers that too much of their time is spent on paperwork and bureaucracy, the Government has committed to a 30% net reduction in the number of data requests made by central Government to the front-line. Freeing up time that is currently spent on unnecessary bureaucracy will mean NHS nurses and doctors have more time to care for patients, police officers have more time to deal with crime, local authorities can focus on improving local communities, and teachers on teaching children.

* Introducing a new form of Impact Assessment from May 2007 which makes estimates of the costs and benefits of new regulations a much more transparent and evidence-based part of the policy making process. The new process also includes more explicit emphasis on post-implementation review.

 

* Working with regulators and local authorities to ensure regulations are enforced in a risk-based, consistent and proportionate manner. For example, the Regulatory Enforcement and Sanctions (RES) Bill will, subject to Parliamentary approval, establish the Local Better Regulation Office as a statutory body, give it powers to promote consistency of regulation at local level, create a modern system of administrative sanctions for regulatory non-compliance and create a power for Ministers to place a duty on regulators to review the burdens they impose and remove any that are deemed unnecessary.

 

* Introducing a web-portal (betterregulation.gov.uk) where businesses and other stakeholders can submit suggestions for simplifying regulations. The suggestions are published along with departmental responses.

 

* Producing for the first time simple, easy to understand guidance with the help of business to support the changes coming in on the 1 October 2007 Common Commencement Date.

 

* Working with other like-minded countries, the UK has made a significant contribution to achieving a series of recent EU better regulation commitments, one of which is an agreement to cut EU administrative burdens by 25% by 2012.

 

1.4. The Government is clear that despite the considerable progress on regulatory reform, much more still needs to be done, including meeting our commitments to deliver a 25% reduction in administrative burdens both at UK and EU level and reducing public sector data burdens by 30%. The Government will continue, year-by-year, to review regulation and to report transparently on its progress. And it is committed to continuing to listen to business, charities, consumers and frontline staff in the public sector, to understand their priorities for regulatory reform.

 

1.5. Currently further reforms are proposed in the following areas in 2008:

 

* Following public feedback about how to improve the consultation of new policy proposals, the Government will develop a revised Code of Practice for consultation to improve engagement and achieve better outcomes from consultation, i.e. more effective policies.

 

* To improve transparency, the Government has committed to publishing the annual total costs and benefits of new regulations based on the cost benefit analyses in impact assessments from April 2008. The UK Government is one of the first in the world to commit to this.

 

* Responding to feedback from those being regulated, the government intends to publish a code of practice to improve the quality and timeliness of guidance.

 

* To explore possibilities for further simplification whilst maintaining or improving regulatory outcomes, the Government is conducting two reviews - a health and safety review and a review of consumer law, to report in 2008

 

1.6. The Government also recognises that it is vital that impacts of regulatory reforms are communicated effectively to businesses and other stakeholders so that they understand and take full advantage of the benefits of reforms. This will be a priority for Government in 2008 and beyond.


2. Initiatives Underway

 

The Government's regulatory reform agenda is focused on delivering better regulatory outcomes while driving down unnecessary burdens. This is achieved by:

 

* reducing the burdens of existing regulations;

 

* achieving effective new regulations;

 

* ensuring inspection and enforcement is proportionate and risk-based;

 

* improving transparency and communication of regulatory changes; and

 

* working with the European Commission, European Parliament and other Member States to address the quality of the stock and the flow of European legislation.

 

This section highlights some of the main achievements to date in each of the above areas.

2.1. Reducing the burdens of existing regulations

Private Sector

Administrative Burden Reductions Programme

 

2.1.1. Administrative burdens are costs incurred by business and the third sector in complying with information obligations arising from regulation, e.g. filling in forms, dealing with inspections, and providing information to third parties such as consumers. Administrative burdens are only part of the total costs of regulation, but they are costs that can often be streamlined without impacting on regulatory outcomes. (They are not the policy costs of complying with regulations, such as paying licence fees or purchasing new equipment.

 

2.1.2. Following on from the Government's response[1] to the Better Regulation Task Force's report, 'Less is More - Reducing Burdens, Improving Outcomes'[2], the administrative burden of complying with Government regulation was measured using the Standard Cost Model methodology to establish a 'baseline' figure as of May 2005.

 

2.1.3. In autumn 2006, Government departments announced their agreement to cutting by a net 25% the 13.4 billion of annual administrative burdens on the private and third sectors by 2010.

2.1.4. To show how this 25% net saving in administrative burdens would be achieved in the years to 2010, departments also agreed to publish annual rolling simplification plans, the first of which were published in December 2006.

 

2.1.5. In December 2007, 19 simplification plans were published, showing more than 700 initiatives to reduce administrative and other burdens. Across Government savings in annual administrative burdens of 3.5 billion have been identified that will be delivered by 2010 (this is 26% of the May 2005 baseline of 13.4 billion). Of this, over 800 million of annual net administrative burdens have already been delivered.

Example of administrative burden reductions delivered to date

 

Weights and Measures (Packaged Goods) Regulations 1986 (DIUS)

 

Consolidates 5 sets of regulations into 1, creating a far simpler regime and greater freedom over the measuring equipment used in a number of sectors - primarily food. Reduces information obligations as a result, saving 119 million per year.

 

New Competent Persons Scheme for Electrical Work (Communities)

 

1.2 million pieces of electrical work a year are now certified by "competent persons", rather than having to go through building control inspection, saving around 110 per check. 65 million annual administrative savings delivered so far.

 

Revision of passenger rail franchise map reducing number of franchises (DfT)

 

25 passenger franchises reduced to 19, saving train operators both time and money in the bidding process competing against others for different franchises. Estimated administrative savings of 32.7 million per year for the rail industry.

 

Consolidation of asbestos regulations (HSE)

 

Companies working with textured decorative coatings - common in domestic premises - no longer need to have an asbestos licence. 28 million annual administrative savings delivered.

 

Improve pension regulations to make payments by employers less prescriptive (DWP)

 

Legislation has been amended to make the need for pension scheme trustees to make reports to the Pensions Regulator less prescriptive. Fewer reports are now filed resulting in benefits for both trustees and the Regulator. Annual net savings of 8 million.

 

Online vehicle licensing (DfT)

 

All car owners can now license their cars online or on the telephone, saving time, effort and queuing. DfT analysts predict an administrative saving to business of 13.9m per year. In addition, if the take-up predicted by the DVLA is accurate, time savings for private motorists may equate to some 20 million per year.

 

Production of UK guidance notes for Reg EC 178/2002 Traceability (FoodSA)

 

Clearer, simpler, more appropriate guidance for UK businesses. Removal of specific EC best practice recommendations. Annual administrative savings of 15.6 million.

 

BROMI company "name changes" (DH)

 

Better Regulation of Medicines Initiative: simplifying the process for changing the name of the owner of a product (e.g. when pharmaceutical companies merge). The Association of British Pharmaceutical Industries estimate 12 million administrative burden saving.

 

Removing requirement for landlords to provide information for backdating housing benefit claims (DWP)

 

In certain cases Landlords are no longer required to provide information for the backdating of housing benefit claims in the case of refugees (instead, customers can now apply for a repayable loan) delivering annual administrative savings of 11 million.

Legislative Reform Orders and the Legislative and Regulatory Reform Act 2006

 

2.1.6. In January 2007, the Legislative and Regulatory Reform Act 2006 (LRRA) came into force. This repealed the Regulatory Reform Act 2001 and gives the Government the power to amend primary legislation by 'Legislative Reform Order' (LRO). The new order-making powers are focussed on better regulation outcomes and address many of the limitations of Regulatory Reform Orders under the Regulatory Reform Act.

 

2.1.7. The first LRO was laid in Parliament by Communities and Local Government in July to simplify requirements for local authority consent regimes. Some 20 further LROs are in development.

 

2.1.8. Legislative Reform Orders provide a way of cutting red tape when burdens are imposed by primary legislation, but as the many examples in simplification plans demonstrate much can be done by changing secondary legislation, by administrative changes (e.g. by reducing the numbers of forms required), or by producing better guidance to explain legislative requirements.

Third Sector (Charities and voluntary organisations)

 

2.1.9. Charities and voluntary organisations rely on high levels of public trust and confidence, and the Government seeks to strike a balance between the need to minimise burdens while preserving sufficient levels of accountability and transparency in the sector.

 

2.1.10. Regulations affect third sector organisations in the same way as public or private sector organisations and many of the examples outlined under the private section will also deliver benefits to organisations working in the third sector. For example many organisations in the sector are employers, and will therefore benefit from the HSE's drive to reduce the costs of risk assessment, and BERR's project to provide straightforward guidance on employment law.

 

2.1.11. In addition, the Government is committed to applying the principles of good regulation to the way that funding is administered - ensuring that any burdens are proportionate and kept to the minimum necessary.

 

2.1.12. Together with the Office of the Third Sector, the Better Regulation Executive will publish a document which will summarise progress in delivering regulatory improvements for the sector. However, steady progress has been made and reported in departmental simplification plans.

Examples of delivery to date

 

Simplifying legal form or status

 

65,000 charities are already benefiting from a simplified annual return form, and many more are benefiting from changes to the registration and audit thresholds as well as enhanced online services which make it easier to change details and submit reports and accounts.

 

Simplifying charity mergers

 

The Charity Commission and Office of the Third Sector simplification plans contain full details of measures that will reduce the admin burdens of this type of legislation by at least 25% by 2010. Some of these measures, including proposals to save 4.6 million by 2010 by increasing the threshold for when a charity needs to prepare a Trustee's Annual Report, have today been published for public consultation in "Financial Thresholds in the Charities Acts - proposals for change".

 

Simplifying other regulations

 

Many charities are also employers and will therefore benefit from the HSE's drive to reduce the costs of risk assessment, and BERR's project to provide straightforward guidance on employment law.

 

Third sector organisations can also face particular regulatory issues due to the nature of their work for instance Criminal Records Checks (CRB).

 

The Home Office has continued to improve and refine its systems for CRB, processes and guidance for when organisations working with children or vulnerable adults may need to conduct criminal record bureau checks on staff, trustees and volunteers. This is evidenced by an almost 90% customer satisfaction.

 

Simplifying Funding

 

Third sector providers have benefited in recent years from improvements to funding and procurement processes, such as the Learning and Skills Council's e-tendering process, and many more will benefit from the Department of Health's introduction of a generic contract for the provision of out-of-hospital services in 2008. The Office of the Third Sector are also funding further research into the scale of this sort of bureaucratic burden on charities, which will provide a basis for further action.

Public Sector

 

2.1.13. Government's public sector strategy 'Cutting Bureaucracy for our Public Services' was published on 26 June 2007 to address complaints from front-line workers that too much of their time is spent on paperwork and bureaucracy. The key strands of the strategy are:

 

* A 30% net reduction in the number of data requests made by central Government to the front-line.

 

* A voice for front-line workers.

 

* A reduction in the stock of unnecessary bureaucracy in the areas the front-line cares most about.

 

* Success that is understood and mirrored through the delivery chain.

 

2.1.14. This programme will provide a step change in the approach to better regulation in the public services. Freeing up time that is currently spent on unnecessary bureaucracy will mean more time for NHS nurses and doctors to care for patients, police officers to deal with crime, local authorities to improve local communities and teachers to teach children.

 

2.1.15. The front-line complains that it has to spend too long collecting information to provide to central government. To tackle this issue each department has compiled a list of the data it requires public sector organisations to provide. This means that for the first time central government has a complete picture of the information it is asking the front-line to provide, better enabling the control and improvement of information requests. In particular these lists of data requirements can be reviewed for continuing relevance, and for any overlaps that could be eliminated. The list of each department's data requirements is published along with its 2007 Simplification Plan. Front-line workers can review these lists and put forward their own ideas for simplifying the data requests that they receive. After verification by external stakeholder groups a total of around 900 data burdens have been identified and departments are now seeking to reduce this number by 30%.

 

2.1.16. Departments have also been working with front-line bodies to identify those bureaucratic burdens that are felt to be most irritating. These may not be the most costly measures, but they are those that the front-line has indicated should be addressed to remove or rectify unnecessary burdens. The major irritants that have been identified are listed in departmental simplification plans, along with proposals for how they will be mitigated. The Better Regulation website has been updated so that any front-line worker can put forward suggestions for simplifying bureaucracy directly to the department responsible.

 

2.1.17. The Government is also introducing legislation to reduce the number of public service inspectorates, and is committed to reducing inspectorate expenditure by around a third during 2008 as overall inspectorate activity is reformed, rationalised and ultimately reduced. Departments have worked together to develop a clear responsibility on the inspectorates to consult each other, and manage the cumulative burden of multiple inspections which fall upon bodies in their areas of responsibility. This responsibility is set out in the gatekeeper provisions which are being included in the new inspectorates' establishing legislation.

Examples of delivery to date

 

ROCR (DH)

 

Over 50,000 hours of NHS staff time (or 1.4m) have been saved thanks to a review of central data collections known as ROCR (Review of Central Returns). In 2006/07 10 collections were discontinued. In addition 100,000 hours have been cut from proposed data collections before they reach the NHS.

 

OFSTED inspections (DCSF)

 

Since 2006 the average length of a school inspection has been cut from five to two days. The notice period has also been reduced from 10 weeks to 2 days. This has resulted in schools and teachers spending less time on administering inspections and reduced unnecessary preparation.

 

Safer and Stronger Communities Fund (CLG)

 

Local Authorities now have more flexibility on how they spend money to benefit local communities. The Safer and Stronger Communities Fund merges several funding streams from two Government departments into one single fund. Local Authorities can now combine separate programmes to renew the poorest neighbourhoods and build safer communities. This allows for a more coordinated approach as well as reducing the administrative work associated with managing separate funds.

 

County Courts Data Review (MoJ)

 

A total of 380 hours per year have been saved for frontline staff following a review of data collected from County Courts.

 

Police Technology (HO)

 

Police officers will continue to see improvements in their daily activities with 50m being spent on the rollout of new technologies. This includes video identification, new generation radios, automated number plate reading, electronic fingerprinting, a computerised missing persons system, and over 10,000 hi-tech hand hand-held data devices which will save officers an average of 54 minutes per day.

2.2. Achieving effective new regulations

The Impact Assessment process

 

2.2.1. On 2 April 2007 the Government announced the introduction of a new Impact Assessment (IA) process. The process is aimed at improving the flow of new regulation through embedding IA at the heart of policy-making, improving the quality of economic and other analysis underpinning policy-making and increasing transparency.

 

2.2.2. Key changes include:

 

* A revised template aimed at improving clarity and transparency of IAs. This includes new requirements to more clearly summarise the rationale for government intervention and the evidence supporting the proposals.

 

* A strengthened Ministerial declaration that will bolster the quality of the analysis in IAs and help embed this earlier in the policy making process.

 

* An increased emphasis on post-implementation review - the need for this existing requirement is featured on the front page of the new IA template.

 

2.2.3. The new process was been phased in - IAs in the new format appeared in public consultations from mid-May 2007 and, from 6 November 2007 it became a requirement for all IAs will use the new format. The Government is now developing a new area on the internet where summaries of all published Impact Assessments will be available, together with links to Impact Assessments on departmental websites.

2.3. Ensuring inspection and enforcement is proportionate and risk-based and improving the performance of regulators

Hampton Review

 

2.3.1. Philip Hampton's report 'Reducing administrative burdens: effective inspection and enforcement' in March 2005 and considered how to reduce administrative burdens on business without compromising the UK's excellent regulatory outcomes.

 

2.3.2. The review found there was much good practice in UK regulation, but also that the system, as a whole, was complicated and good practice was not uniform. Overlaps in regulators' activities meant there were too many forms, too many duplicate information requests and multiple inspections imposed on businesses. The Government is implementing the recommendation of the Hampton Review in the following ways:

 

The Legislative and Regulatory Reform Act 2006 (the "LRRA") is a key tool for taking this agenda forward. For instance Section 21 of the LRRA set out and provides for a duty to have regard to the Better Regulation Commission's five Principles of Good Regulation (the "Principles"). These principles are that regulatory activities should be carried out in a way which is transparent, accountable, proportionate and consistent, and should be targeted only at cases in which action is needed. The LRRA also provided a Minister of the Crown with a power to issue a Code of Practice in relation to the exercise of regulatory functions (Section 22).

 

Following parliamentary approval (given on 27 November 2007), the Regulators' Compliance Code was issued on 17th December 2007 and an Order then made giving effect to the duties to have regard to both the Principles and the Code from 6 April 2008. The Order (SI 2007/3544) applies the legal duties under section 21 and 22 to certain regulators, such as the HSE and Environment Agency.

 

The Code, for both national and local regulators, together with the five Principles 7make it legally binding that regulators covered by the Order ensure inspection and enforcement is efficient, both for the regulators themselves and those they regulate. The aim is to ensure that, for the majority of business it will be easier and less burdensome to comply with legislation. These new duties should mean that regulators increasingly target their inspection and enforcement resources at those who actually pose greater risk of harm: protecting consumers, workers, the environment etc.

 

The Government is overseeing a major programme, already partly completed, to merge regulators and inspectorates in both the private and public sectors to ensure inspections do not impose overlapping burdens.

 

The Regulatory Enforcement and Sanctions Bill was introduced to Parliament in November 2007, and if passed, will modernise the penalty regimes which regulators use by giving them access to flexible, efficient and proportionate set of administrative sanctions.

 

If passed, this Bill will also put on a statutory footing the Local Better Regulation Office set up in September 2007 to address businesses' request for clear and consistent inspection and enforcement across all local authorities. This body focuses on reducing burdens on business by ensuring local inspection is proportionate and targeted. It will also support the capacity of local authority regulators to deliver their services more effectively.

 

"Ensuring a clear and consistently fair system across all local authorities is a 'must have' for the small business sector.  Adding on the anticipated reduction in costs to businesses means that this is a positive development and we welcome the creation of this new body."  

 

John Walker, National Policy Chairman of the Federation of Small Businesses.

Review of Independent Regulators

 

2.3.3. To assess how regulators are performing in line with the Hampton principles and delivering proportionate enforcement to ensure compliance, the Better Regulation Executive has worked with the National Audit Office and regulators to develop a review framework published in May 2007. Five major regulators have been reviewed - the Health and Safety Executive, Food Standards Agency, Financial Services Authority, the Environment Agency and the Office of Fair Trading. Reports on each of the regulators will be published in February 2008.

Priorities for Local Authorities

 

2.3.4. Local government has been calling for central government to prioritise its expectations of what local regulatory services should focus on and deliver for years, but silo thinking and special interest pleading have prevented Whitehall making progress in this area.

 

2.3.5. The recommendations following the Rogers Review on national enforcement priorities for local authority regulatory services were accepted in full at Budget 2007. This has meant that for the first time local authorities have clarity about what central government's main priorities are for local regulatory services. The five main national enforcement priorities are:

 

* air quality;

 

* alcohol, entertainment and late night refreshment licensing and its enforcement;

 

* hygiene of food businesses;

 

* improving health in the workplace;

 

* fair trading: and

 

* an additional time-limited priority of 'animal and public health.

 

2.3.6. The Better Regulation Executive has been working closely with major stakeholders including the Chartered Institute of Environmental Health (CIEH), Trading Standards Institute (TSI), Local Government Association (LGA) and Local Authorities Coordinators of Regulatory Services (LACORS) to disseminate information about these priorities to local authorities and those responsible for enforcement activity.

 

2.3.7. To ensure that these priorities are embedded, the new performance framework for local authorities and local authority partnerships, published by CLG in October 2007, includes indicators on all of the National Enforcement Priorities of Central Government, as well as a dedicated indicator to measure business satisfaction with local regulatory services (NI 182). This indicator will measure whether businesses feel that they have been treated fairly by regulatory services, and whether they feel that the contact that they had was helpful. The results will allow local government to demonstrate that they are contributing towards a business friendly environment, at the same time as achieving excellent regulatory outcomes.

Retail Enforcement Pilot

 

2.3.8. The Retail Enforcement Pilot (REP) is evaluating new ways of risk bases working for local authority officers from Food Safety, Health and Safety, Trading Standards, Licensing and Fire Safety services. Through sharing of data and joint working these officers are able to conduct fewer inspections, reducing the administrative burden on lower risk businesses.

 

2.3.9. It means compliant businesses will have fewer inspections, saving them time and money. It frees up time for low-risk retail businesses to get on with running their businesses, and for regulators to focus on illegal traders and poor performing businesses.

 

2.3.10 Steady progress is being made with:

 

10 local authorities are now live with REP and several more are intending to launch this year.

 

More than 20 local authorities have declared themselves ready to invest in and establish project management so they can engage fully with REP.

 

Supplier evaluation to establish which suppliers are capable of going live by late Spring 2008 is now complete, which will enable local authorities to carry out their own local competitive procurement.

 

Research and further development work is underway includes workshops to refine REP visits checklist used by officers, provide coaching o reduce the time it takes to complete the checklists and to develop data sharing standards across local authorities.

2.4. Improving transparency and communication of regulatory changes

Common Commencement Dates

 

2.4.1. To reduce the burden of changing regulations for business, the majority of changes affecting business come into force on two dates (Common Commencement Dates).

 

2.4.2. This October, for the first time, simple, easy to understand guidance was produced with the help of business to support the changes coming in on the Common Commencement Date. This highlighted the most important changes and provided links to more detailed guidance. In future, we will consider direct postal or email channels as a way of reaching further businesses.

The www.BetterRegulation.gov.uk website

 

2.4.3. Over the last year, the Government has also improved the website that allows anyone to suggest specific regulatory changes. Three examples from the 2007 simplification plans which were suggested via the website are:

 

* Publication on the HSE website of a full list of all health and safety regulations to benefit all sectors and in particular SMEs by delivering a quick and simple route to locate health and safety regulations and requirements for businesses. Since it went live in October it has had 22,000 hits a month and has been welcomed by business.

 

* HSE's 'core criteria' measure. The construction industry is benefiting from the restructure, simplification and clarification of sector-specific regulations. Companies are now assessed on specific criteria and no longer need to undertake multiple assessments, saving small electrical contractors 17,000 in costs annually.

2.5. Better Regulation in Europe

 

2.5.1. The Government is not limiting its better regulation work to the national level. To ensure European Union rules contribute to the UK's competitiveness in a globalised economy, we have put strong political efforts into reforming EU laws which generate unnecessary administrative costs. Together with other like-minded countries, the UK has made a significant contribution to achieving a series of recent EU better regulation commitments, one of which is an agreement to cut EU administrative burdens by 25% by 2012.

 

2.5.2. The European Commission coordinating this work has already identified 40 EU laws that should generate significant savings. These range from simplifying the payments systems under the common agricultural policy, to reforming social legislation for European road transport. We estimate that in the UK these two measures alone could generate 110 million of administrative costs for farmers and 145 million for road hauliers respectively.

 

2.5.3. The Government will continue to play a leading role in delivering these ambitious savings over the next few years.

 

2.5.4. The Government is also committed to ensuring that agreed EU legislation is implemented in the best way. Following Lord Davidson's Review in 2006, the Government launched new guidance in September 2007 to ensure that EU legislation is implemented in the UK in a way that fulfils our legal obligations, while avoiding unnecessary burdens which can place UK companies at a competitive disadvantage. 2007 simplification plans show how departments are delivering the Davidson Review's specific recommendations for reducing burdens in the stock of existing legislation originating from the EU.


3. Better Regulation Executive Budget

3.1. Operational Costs

 

3.1.1. The Better Regulation Executive has a headcount of 89 and a total budget for 07/08 of 10.598M. This includes 1.5M for the delivery of the Retail Enforcement Pilot and 2.7M for the establishment of the Local Better Regulation Office. The remaining 6.398m is split across the Better Regulation Executive's objectives which are:

 

* reducing the burdens of existing regulations;

 

* achieving effective new regulations;

 

* ensuring inspection and enforcement is proportionate and risk-based;

 

* improving transparency and communication of regulatory changes; and

 

* working with the European Commission, European Parliament and other Member States to address the quality of the stock and the flow of European legislation.

3.2. Administrative Burdens Measurement Exercise

 

3.2.1. Following a procurement exercise carried out under the OGC Suppliers Catalogue (S-Cat) framework, PricewaterhouseCoopers (PwC) were selected to measure the administrative burdens imposed by regulations actively enforced in May 2005 on businesses, charities and the voluntary sector using the Standard Cost Model (SCM)[3] on behalf of Government. Contracts, between each department and PwC, were tendered on a fixed price basis dependent upon the total number of regulations measured.

3.3. Other Stakeholders

 

3.3.1. Departmental Better Regulation Units play a coordinating role within their respective departments for the regulations they produce, and their size and budget varies depending on the regulatory responsibilities of departments and departmental procedures for policy making. But it should be noted that it is policy makers who are primarily responsible for embedding better regulation principles in the day to day activities of policy making. For example effective consultation and high quality Impact Assessments are integral to good policy making.

 

3.3.2. Details of their current budget and the resources available to them for some of the departments have been provided below (these exclude details for economic or analytical support who often have split responsibilities):

 

Department

2007/08 Budget

No. of Staff

BERR

600k

8

DCLG

N/A

3

DCMS

118k

2.5

DEFRA

N/A

18

DCSF / DIUS

N/A

3

DWP

N/A

3

FCO

N/A

0.5

Forestry Commission

6k

2

FSA

350k

5

Home Office

N/A

2.5

HSE

N/A

5

MOD

N/A

0.5

 

 


4. Performance Monitoring and Evaluation

4.1. Current BERR SR04 Public Service Agreement (PSA)

 

4.1.1. SR04 PSA 2 Better Regulation states:

 

* "By April 2008, ensure that departments deliver better regulation and tackle unnecessary bureaucracy in both the public and private sectors through:

 

(i) reducing the overall administrative burden;

 

(ii) maintaining the UK's international standing on better regulation; and

 

(iii) improving [business] perception of regulation."

 

4.1.2. BERRs Autumn Performance Report outlines progress towards our Public Service Agreement (PSA) targets which cover the period 2005 to 2008 and is an important tool for achieving accountability and transparency.

(i) Reducing the overall Administrative Burden

 

4.1.3. The Government wide administrative burden at May 2005 was approximately 13.4 billion. The UK Government is in the middle of an ambitious programme to reduce administrative burdens on business and charities by a net 25% by 2010

 

4.1.4. Departments have published their second Simplification Plans last year[4], which show strong progress on delivering both the net administrative burdens target by 2010 and in delivering regulatory savings to the UK economy as a whole. Government identified annual net savings in administrative burdens of 3.5 billion by 2010, (26% of the May 2005 baseline). Of this, over 800 million of has already been delivered.

 

4.1.5. The National Audit Office report to Parliament annually on the achievements of this programme. As part of its review, the NAO is conducting an annual survey to track around 2000 businesses' perceptions of the burden of regulation and the impact of departmental initiatives to reduce burdens (the first report was published in July 2007 see below).

(ii) Maintaining the UK's International standing on better regulation

 

4.1.6. The UK wants to remain well placed in international comparisons of regulatory burdens and regulatory reform, defined as remaining within the top 10 internationally and within the top 3 in the EU based on the following surveys:

 

* World Bank 'Doing Business' survey[5] (published annually); and

 

* Organisation for Economic Co-operation and Development (OECD) Structural Policy Indicators and Priorities for 'product market regulation' and 'barriers to entrepreneurship' (on the basis of surveys carried out in the publication 'Going for Growth'[6]).

 

4.1.7. The OECD Economic Survey of the United Kingdom 2005[7] ranked the UK top among the G8 countries and second among all OECD countries for liberal product market regulation.

 

4.1.8. The World Bank's study of 178 countries 'Doing Business 2008'[8], published September 2007, placed the UK second in the EU and sixth in the world for the best business conditions.

 

Economy

Ease of Doing Business Rank

(Out of 175)

Singapore

1

New Zealand

2

United States

3

Hong Kong, China

4

Denmark

5

United Kingdom

6

Canada

7

Ireland

8

Australia

9

Iceland

10

 

4.1.9. The Better Regulation Executive will work with Departments to analyse any significant changes in the regulatory regimes in other leading countries thereby ensuring that we can learn from best practice and maintain the UK's international competitiveness.

(iii) Improving business perception of regulation

 

4.1.10. The National Audit Office (NAO) has developed an annual survey on business perception of regulation to evaluate government efforts in better regulation which involved surveying around 2000 businesses.

 

4.1.11. One element of the survey measured the extent to which businesses understand the purpose of regulation, the ease of compliance and the perceived proportionality of the regulations. It is based on performance against a basket of the 5 policy areas that were the most important in the administrative burdens exercise - tax administration, employment law, health and safety law, planning and company law.

 

4.1.12. The NAO published the results from the 2007 survey of business perceptions on 25 July 2007[9].

 

4.1.13. The 2007 survey carried out 1,882 interviews. When asked to comment on the statement 'Most regulation is fair and proportionate' with regards to the appropriate policy area, the responses were as follows:

 

* Strongly agree: 5%

* Tend to agree: 35%

* Neither agree nor disagree: 11%

* Tend to disagree: 25%

* Strongly disagree: 19%

* Don't know: 4%

 

4.1.14. Therefore the baseline of this measurement is 40%. The 95% confidence interval for this indicator is +2% or -2%.

 

4.1.15. For example the NAO survey highlights that business awareness of better regulation initiatives is very low, around 10-12%. Also 85% of businesses are not confident that Government will not succeed in reducing regulatory burdens on business and deliver real benefits for them. In the IoD survey of UK businesses 46% found that regulation in the last twelve months was worse than before and 48% have noticed no change; a mere 1% had noticed a improvement in the regulatory environment.

4.2. Focus Group Research on the Perceptions of Regulation

 

4.2.1. The Better Regulation Executive also makes regular efforts to hear and understand the opinions of business and the public about regulation in order to inform its work. Much of the existing knowledge on attitudes towards regulation is anecdotal or focuses on very specific policy areas. To develop its understanding in more depth the Better Regulation Executive commissioned Ipsos MORI to carry out a programme of qualitative research designed to explore how businesses and the public feel about regulation.

 

4.2.2. Ipsos MORI conducted 14 focus groups with businesses (small and large) and 6 groups with the general public in different locations around the country in 2007. In addition to this a number of in-depth telephone interviews were conducted with leading business representatives.

 

4.2.3. After listening in detail to the opinions of the general public and business about regulation, the research was able to provide the Better Regulation Executive with a number of interesting findings. Although spontaneous reactions to regulation tended to be negative discussion and information about regulation prompted more positive views. Both business and citizens could see tangible benefits to regulation - the creation of a level playing field for business and providing protection to individuals where they could not exercise control over the risks they faced

 

4.2.4. Furthermore, the research found that there was a real appetite for information on regulation. People wanted to know why various regulations are in place. They feel that having access to this will help them to understand the issues in more depth and, furthermore, may help to gain their buy-in. However, there is little evidence to suggest that participants are proactive in accessing such information. They would prefer to have it provided to them, rather than it simply being made public in the hope that they might find it.

 

4.2.5. Full details of this research can be found at: http://bre.berr.gov.uk/regulation/reviewing_regulation/perceptions/index.asp

4.3. Independent assessment of Regulatory Impact Assessments (RIAs) and new Impact Assessments (IAs)

 

4.3.1. The NAO have reviewed the use of Regulatory Impact Assessments (RIAs) across Government since 2001.

 

4.3.2. In the last two years they had a departmental focus - examining a sample of Impact assessments and considering how departments have sought to use RIAs in the decision-making process. However, with the introduction of new Impact Assessment (IA) guidance and a revised template has meant they have changed the focus of this year's review to undertake a broader examination of department's application of RIAs/IAs.

 

4.3.3. Their 2007/08 review will examine the scrutiny and quality assurance arrangements that departments are implementing.


5. Consultation and Co-ordination of regulatory reform

5.1. A cross-Government goal, listening to and responding to those being regulated

 

5.1.1. The regulatory reform agenda is important across Government. The role of the Better Regulation Executive is to support and, where appropriate, challenge departments and regulators to deliver effective regulations for the private, public and third sectors.

 

5.1.2. Each department has a Better Regulation Minister who is accountable for the wider better regulation agenda within his or her department. They are supported by Better Regulation Board Level Champions, whose role is to ensure that board members are committed to the wider better regulation agenda, provide adequate resources within their departments to minimise unnecessary burdens, and liaise with Better Regulation Executive senior management. In addition, Departments have established Better Regulation Units (BRU) that are dedicated to supporting policy teams in reducing administrative burdens and delivering the wider better regulation agenda. The BRUs act as the liaison point for the Better Regulation Executive and are the project managers with responsibility for working with policy teams to identify and implement measures.

 

5.1.3. The administrative burdens reduction programme, the drive to reduce data burdens on the public sector front line, improving inspection and enforcement and other initiatives mentioned earlier in this memorandum are examples of close working between the Better Regulation Executive, government departments, regulators and those being regulated. The Better Regulation Executive considers it invaluable to use stakeholder feedback to develop, monitor and improve initiatives. Further examples of cross-Government working on specific projects and engagement with external stakeholders are set out below.

5.2. Examples

Consumer information:

 

5.2.1. In November 2007 the Better Regulation Executive and the National Consumer Council published a report to Government setting out recommendations to maximise the effectiveness of information government requires third parties - such as businesses - to provide to consumers. Government has accepted these recommendations.

 

5.2.2. The project aimed to benefit both business and consumers by improving the effectiveness of information, and ensuring it was only used where it could make a difference. To this end, the review was conducted jointly with the National Consumer Council. The review team commissioned a research company to conduct 12 qualitative discussion groups with consumers to fully understand consumer views and experiences. The team held over 60 interviews with stakeholders from government bodies, business and NGOs. The team spoke directly with businesses including Boots, ASDA and Unilever as well as industry bodies such as the British Toy and Hobby Association, the Association of British Insurers and CBI.

 

5.2.3. The findings from this research and discussion fed into an interim report which was published in July. The report asked for comments to inform debate and discussion. The responses the team received were overwhelmingly positive about the thrust of the report's finding that regulation could be used more effectively to help consumers take decisions. The team also worked with other Government departments and presented initial findings to a seminar of departmental board-level 'Better Regulation Champions'.

 

5.2.4. The final report and recommendations built on the areas for change set out in the interim report. Alongside the final report, the Better Regulation Executive and National Consumer Council published a guide for policy-makers across government. The team are planning a European launch event in earlier 2008 to publicise their findings.

Regulation and Business Advice

 

5.2.5. Lead by the Better Regulation Executive this project looked at the reasons behind businesses spending large sums of money on advice on how to follow regulations. Supported by an advisory group of business organisations, businesses intermediaries, and government departments met to discuss the emerging findings and recommendations.

 

5.2.6. The project also drew heavily on the findings of focus groups with businesses. These helped the project to identify the key reasons behind businesses paying for regulation advice. These were:

 

* The volume and complexity of regulation;

 

* Low awareness of government guidance;

 

* Regulatory change;

 

* Poor quality government guidance; and

 

* Uncertainty, risk and lack of confidence.

 

5.2.7. Two key findings from the project are being taken forward. These are:

 

Improvements to the communication of regulatory change.

 

* The Better Regulation Executive worked with business focus groups and business organisations to improve the quality of guidance on regulations and the information provided on Common Commencement Dates and to develop new ways of communicating the guidance.

 

* The guidance issued for common commencement dates been transformed from 60 pages of information structured by government department to a single page summary of key changes, supported by a 1 page summary for each change providing enough information for the majority of businesses to comply. All of this guidance is in plain English and easy to understand.

Improving guidance

 

* A code of practice setting out the standards of guidance businesses can expect from government will be published in 2008. A consultation document has been developed in conjunction with an advisory panel of business representatives and departments. The code itself will build on comments received from stakeholders during the consultation.

Health and Safety Review

 

5.2.8. The Better Regulation Executive, with support from the Health and Safety Executive / Health and Safety Commission, have initiated a review considering how the health and safety regime affects small employers and employers whose overall risk is relatively low. The objectives of this review are to:

 

* explore from the perspective of low risk businesses (especially SMEs) how the health and safety regulatory regime cumulatively impacts on them; what costs and burdens it places on them, including international comparisons with regimes in other jurisdictions; what behaviour changes it has driven; what benefits they and their employees perceive; and what particular difficulties they face in complying. This should in particular draw out any practical relationship with linked requirements (for example, building regulations, environmental, fire and food safety);

 

* investigate how the health and safety regulatory regime (including both the regulators and other drivers such as insurance) deals with new and emerging risks, especially health risks;

 

* assess the relative importance of key drivers of the main costs/burdens (regulatory requirements, regulator behaviour, insurance demands, business advisers etc); and in the light of this make recommendations of priority areas for action to minimise burdens without compromising Health and Safety. These should take account of any recommendations on regulator behaviour made by the Hampton Implementation Review of HSE being undertaken in parallel by Better Regulation Executive/NAO.

 

5.2.9. Stakeholder input is vital to the success of this review, ranging from those with an interest in the Health and Safety system to those with professional involvement or experience of being regulated or affected by it. Therefore the review is holding a series of stakeholder events in the English regions and the devolved administrations.

 

5.2.10. These have been set up in partnership with colleagues in Government Offices, Regional Development Agencies and Devolved Administrations through January 2008.

Consumer Protection Regime

 

5.2.11. The Better Regulation Executive and Consumer and Competition Policy areas within BERR are conducting a review of the consumer protection regime to establish opportunities to simplify legislation, while continuing to ensure the public get a fair deal and high quality products. It is also exploring opportunities to improve enforcement, consumer empowerment and redress.

 

5.2.12. The team is working closely with consumer groups, business organisations, academics, NGOs and local and central government organisations to build current evidence on the functioning of the consumer protection framework and gather ideas about opportunities for future reform. They have held 30 stakeholder meetings to date and recently held a workshop with over 40 stakeholder representatives including the CBI, Which?, Lloyds TSB, the National Consumer Council and local authority trading standards. They are currently conducting a number of visits to local authorities to see how legislation is working in practice for businesses and Trading Standards.

Review of Consultation

 

5.2.13. Public engagement, including consultation on policy development and service design, is an important part of a modern representative democracy. Consultation is a key stage of engagement with both public and stakeholder organisations as it ensures decisions are informed by listening to those who may be affected by new proposals. Since 2001 the Government has had in place a Code of Practice to provide officials with a framework for consultation exercises on policy development. The adoption of a Code proved particularly popular with stakeholder organisations which regularly participate in consultations and has also been used as a model by other public sector bodies around the UK.

 

5.2.14. Following the criteria of a Code of Practice is, of course, not an end in itself. The outcomes of consultation are what really count. In 2007, the Government has sought public feedback about how to improve the consultation of new policy proposals to make sure that all sources of expertise are used when policies are designed. Proposals for reform will be set out in 2008.

Better Regulation Executive Visits Programme

 

5.2.15. The Better Regulation Executive is also committed to understanding the regulatory issues that those working in the private, public and third sectors are facing. To achieve this the Better Regulation Executive has established the Visits Programme where staff at all levels throughout the Better Regulation Executive are encouraged to see first hand how those being regulated are impacted by regulation and their ideas for change.

www.BetterRegulation.gov.uk Website

 

5.2.16. The betterregulation.gov.uk website, mentioned in Section 2.4, is also a very useful mechanism of listening to and responding to ideas from the front-line.

 


6. Future strategy

 

6.1. Responsibility for better regulation was with the Cabinet Office until the machinery of government changes in June 2007. The Better Regulation Executive remains a cross-Government unit and continues to hold all those responsible for regulations impact the private, public and third sectors to account including wider BERR.

 

6.2. There has been considerable progress on regulatory reform, as outlined in earlier chapters. But the Government recognises that much more still needs to be done, including meeting our commitments to deliver a 25% reduction in administrative burdens both at UK and EU level and reducing public sector data burdens by 30%. The Government will continue, year-by-year, to review regulation and to report transparently on its progress and is committed to continuing to listen to business, charities, consumers and frontline staff in the public sector, to understand their priorities for regulatory reform.

 

6.3. Currently further reforms are proposed in the following areas in 2008 and beyond:

 

* Following public feedback about how to improve the consultation of new policy proposals, the Government will develop a revised Code of Practice on consultation to improve engagement and achieve better outcomes from consultation, i.e. more effective policies.

 

* To improve transparency, the Government has committed to publishing the annual total costs and benefits of new regulations based on the cost benefit analyses in impact assessments from April 2008. The UK Government is one of the first in the world to commit to this. This has been included as an indicator in BERRs new PSA over the CSR 2007 period to deliver the conditions for business success. The Government commitment to administrative burdens reductions is also an indicator in this new PSA.

 

* The Government also has new embedded better regulation principles in a number of its key Public Service Agreements and Departmental Strategic Objectives for the 2007 Comprehensive Spending Review period, covering the period from 2008 - 2011. For instance the Department for Environment, Food and Rural Affairs (DEFRA) has a PSA on climate change policy which includes a new indicator on the cost effectiveness of its policies. This will help the Government demonstrate that its measures to tackle climate change are subject to robust cost benefit analysis. BERR also has a department strategic objective for CSR 2007 period to ensure that all Government Departments and agencies deliver better regulation for the private, public and third sector.

 

* The new national indicator set for local authorities announced in October 2007 includes an indicator on business satisfaction with regulatory services (environmental health, trading standards and licensing), demonstrating the importance the Government attaches to delivering better regulation at local authority level and complementing Better Regulation Executive's work at national level. The indicator has been subject to consultation and the Government is currently considering the responses.

 

* Responding to feedback from those being regulated, the government intends to publish a code of practice to improve the quality and timeliness of guidance.

 

* To explore possibilities for further simplification whilst maintaining or improving regulatory outcomes, the Government is conducting two reviews - a health and safety review and a review of consumer law, to report in 2008.

 

* The Government also recognises that it is vital that impacts of regulatory reforms are communicated effectively to businesses and other stakeholders so that they understand and take full advantage of the benefits of reforms. This will be an important priority for Government in 2008 and beyond.

 

 



[1] Government response to the Better Regulation Task Force report 'Less is More' (March 2005):

http://www.brc.gov.uk/upload/assets/www.brc.gov.uk/lessismore_response.pdf

[2] Better Regulation Task Force report 'Less is More' (March 2005):

http://www.brc.gov.uk/publications/lessismoreentry.aspx

[3] HMRC undertook a separate but parallel exercise contract KMPG to undertake the measurement of administrative burdens resulting from the Tax regime, due to the specific nature of the associated regulations.

[4] Please see below for the 2006 Simplification Plans and for further information (the second Simplification Plans (2007) are not currently available online):

http://bre.berr.gov.uk/regulation/reform/simplifying/plans.asp

[5] World Bank 'Doing Business' Survey:

http://www.doingbusiness.org/

[6] OECD 'Going for Growth 2007':

http://www.oecd.org/growth/goingforgrowth2007

[7] OECD Economic Survey of the United Kingdom 2005 (October 2005): http://www.oecd.org/document/43/0,2340,en_2649_201185_35456619_1_1_1_1,00.html

[8] World Bank http://www.doingbusiness.org/documents/Press_Releases_08/DB_08_Oveview_English.pdf

[9] NAO survey 'Reducing the cost of complying with regulations: The delivery of the Administrative Burdens Reduction Programme, 2007':

http://www.nao.org.uk/publications/nao_reports/06-07/0607615.pdf