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
1.1. 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.
§ 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
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)
ú 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)
ú 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)
ú 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)
ú 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)
ú 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)
ú 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)
ú 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)
ú 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)
ú 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.
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.
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
ú 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
ú 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
ú 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.
ú Third sector
organisations can also face particular regulatory issues due to the nature of
their work for instance Criminal Records Checks (CRB).
ú 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
ú 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.
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)
ú 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)
ú 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)
ú 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)
ú 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)
ú 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
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:
ú 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).
ú 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.
ú 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.
ú 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.
ú 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.
ú 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.
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.
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.
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:
ú 10 local authorities
are now live with REP and several more are intending to launch this year.
ú More than 20 local
authorities have declared themselves ready to invest in and establish project
management so they can engage fully with REP.
ú 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.
ú 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
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.
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.
3.1. 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
|
4.1. 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.
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.
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.
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.
5.1. 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
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.
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.
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.
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.
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.
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.
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.
6.1. 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
