UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 304 - i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

REGULATORY REFORM COMMITTEE

 

 

REGULATORY REFORM AND THE BETTER EXECUTIVE

 

 

Tuesday 29 January 2008

MR WILLIAM SARGENT and MR JITINDER KOHLI

Evidence heard in Public Questions 1 - 62

 

 

USE OF THE TRANSCRIPT

1.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

 

2.

Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

 

3.

Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.

 

4.

Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.

 


Oral Evidence

Taken before the Regulatory Reform Committee

on Tuesday 29 January 2008

Members present

Andrew Miller, in the Chair

Gordon Banks

Lorely Burt

John Hemming

Judy Mallaber

Dr Doug Naysmith

Phil Wilson

________________

Memorandum submitted by the Better Regulation Executive

 

Examination of Witnesses

 

Witnesses: Mr William Sargent, Executive Chair and Mr Jitinder Kohli, Chief Executive, Better Regulation Executive, gave evidence.

Q1 Chairman: Can I welcome you, Mr Sargent and Mr Kohli, to the session. Mr Sargent, we last met talking of these things on a pan-European basis in Berlin; there is a dimension to that to which we will come later. The Committee, for various reasons, is on a fairly tight timescale so we want to handle this fairly crisply. Thank you for your memorandum that you went to us. I would invite you to start off by adding any words to that but we have a series of questions we would like to pose to you. If you would introduce yourself and introduce your associate?

Mr Sargent: Thank you very much, Chairman. I am very pleased to be here. I am William Sargent and I am the Chair and Jitinder Kohli is the Chief Executive of the Better Regulation Executive. We have been in position now for about 24 months so we are rather pleased that this is an opportunity for us to explain and to give some profile to the work that we are doing. Before I start perhaps I could comment on our Minister? Baroness Vadera is not with us this morning and sends her apologies. The actual identification of the portfolios was only finalised yesterday and I know from chatting to her yesterday at some length she is rather keen to engage with the Committee in discussion but felt that it was too early for her to be of any useful contribution in that. She is hoping she will be able to do so at a later date. So I table her apologies before I start. As I said, Jitinder and I have been in position ourselves for 24 months now in an active role. The document that we gave you I feel lays out effectively what we are trying to do. We are looking very much at taking the word "red tape" and breaking it down into its constituent elements in terms of how we go about the business of enhancing the environment in which we work. We start with some very clear principles in place in that regulation is a good thing, is a positive thing in society and in particular in the business community. I come from the private sector and Jitinder is a highly experienced civil servant who has been across four different departments in the government; so we work as a team and we are very clear that what we are trying to achieve is better regulation, by which we mean that regulation is in place to achieve benefits, protections, to encourage fair markets - nobody wants to operate in an unregulated society in terms of the business community. It creates a level playing field in that, and clarity of regulation is very important to us. So we start with a very clear mandate that we are not here about diluting protections, obligations, rights, anything like that; we are about ensuring that the amount of regulation that is introduced and produced and exists is done in a very clear, coherent way and does not create unnecessary costs or burdens for people on the receiving end or the people who are actually responsible for administering them in the organisations, in the public, private sector and third sector. So we are very clear about that particular perspective. You very kindly laid out a statement that you wanted us to give you and I hope that the memorandum has covered all those areas, and I think it might be best to go into the specific questions and for us to respond to you.

Q2 Chairman: Leading on from your introduction, do you think that the UK is an over-regulated state?

Mr Sargent: I do not in terms of the context of my own personal experience. I have over the past decade set up and run businesses in Germany, Spain and the UK and now currently in the UK and the United States and I am very clear from running a business that has gone from 40 people to 750 people that my operation in London is somewhat less heavily burdened by regulation than the one in New York, for example. People hold up America as the bastion of things that are supposed to be a light touch and easy, but the fact of operating on a daily and weekly basis is that things are much more difficult in New York City than it is in Soho in London, is the observation I have. When I look at the evidence across the world, when we look at other countries and I look at world banks, OECDs and we are currently ranked sixth in the world out of 178 countries, I feel that we are in a good place. However, it is important not to take that for granted because things move on all the time.

Q3 Chairman: Is there, therefore, an optimal level of regulation? Following from that, the target of 25 per cent reduction by 2010 seems a bit of an arbitrary target. If we are not over-regulated what is the point of that target? Is there some objective measure in that?

Mr Sargent: The target refers specifically to a part which is the administration costs relating to regulation. There was an example where we were able to get our analysis and be very tangible and to analyse costs of specific forms of information that had to be given either to shareholders or consumers or the government itself, and we found that when we looked at the evidence around the world - and the Dutch and the Danes in particular had been ahead of us on this particular area - that first of all setting a target was very important and it clearly achieved behavioural changes within development, so it was very important to set one. The experience we saw of the Dutch in particular, we had the benefit of them being three or four years ahead of us so we could actually see that setting a target was achievable and it was a reasonable target to set to achieve certain behaviours and by setting it the evidence has proven, as I say in Holland, that this is something worth going for.

Mr Kohli: Could I just add exactly what the target attaches itself to? This is the target of the administrative burden as opposed to regulation as a whole and we defined the administrative burden following the experience of the Dutch government by measuring requirements in law to provide information - that could be information through filling in a form, which is the bulk of the burden, through complying with an inspector or either waiting for an inspector to turn up or preparing bits of paper for an inspector, or it could be providing information to third parties. It is a very defined concept of regulatory administrative burden and broadly the government takes the view that it is possible to reduce this number whilst at the same time maintaining outcomes. If we could design forms in an easier way that were easier for people to make sense of whilst at the same time make sure that planning decisions, let us say, to take one example, are still taken on a sound basis, then that would be a good thing for everyone. That is why we are tackling this particular area; and the 25 per cent number I think is a pragmatic number in terms of your question.

Chairman: I am going to go slightly outside our planned structure because one of our colleagues has to be in two places simultaneously - one of the problems of Parliament. Lorely Burt.

Q4 Lorely Burt: Good morning. I want to ask about the deregulation initiatives that you have introduced already. I would like to ask you about the monitoring of the success of these. Post-implementation is always a big concern I suppose to MPs because we do not see a great deal of it and what we do see is patchy in terms of the physical reviews, so can I ask you what steps you are taking to monitor the effect of deregulation and to undertake post-implementation reviews? What evidence do you have to support the success of other specific initiatives on the reform agenda as a whole?

Mr Sargent: Deregulation is one of the powers that apply to the agenda to do with better regulation. The way it evidences itself most is in the simplification plans that all the authorities produce. So 19 departments and agencies have produced at the end of 2006 and the end of 2007 plans which specifically say, "These are the areas we are going to simplify" and some of those you would call deregulation where they are moving on simplifying some elements there. For example, the Health & Safety Executive has about half the number of forms it had, so that would be an example of deregulating to some extent. When they produced the 2007 plans, which is the second year, part of the part of the requirement that we put on them was to report on what had happened as a result of the 2006 plans and the intention is that that would carry on so that we would see at the end of this year, for example, reporting on what happened in the measurements. There were 741 measurements identified to simplify in general and 270 of them approximately had already been done during 2007, so in 2008 you see reports on what happened in 2007 and 2006. Each department is responsible themselves for publishing that and for anybody from Parliament through to the various communities to look at them and say, "Has it happened, has it not happened?" So our view is very much that monitoring is done by the public at large, so to speak. That is my first observation.

Q5 Lorely Burt: So that is great that each department is monitoring so that it has these targets and can say, "Has this happened or has it not happened?" Are they looking at yes, it has happened and the effect upon the target audience has been X or Y in terms of the amount of time or the cost factor? And has the target audience actually been consulted in any systematic way in order to create an evaluation that you can actually measure?

Mr Sargent: These were generally put together in the first place by visiting, consulting and doing focus groups and involving people and in general most departments had structures in place, whether they be boards that they put together of interested parties, and they then test those ideas against them, and in turn both ourselves as the Executive as well as the departments and people who are measuring the performance will validate whether the claims that they are making are true or not. The challenge that we have, which I think is possibly the next step of where you are heading, is has the community at large, the business community or the charities felt that difference? That, I think, is the bit that we have yet to crack effectively because I was very anxious that we only spoke about success once we could prove it and I feel that these implementation plans give us the tools to be able to say that we have actually done this. The bit that we now need to do is to pull through by getting the business community in particular to say, "I notice that you have a number of this or that," and that is I think where we are yet to be fully effective.

Lorely Burt: That really will be your ultimate measure of success, will it not, if you get the sometimes curmudgeonly business community to say, "Actually that is quite good; that is being helpful." I know one of my colleagues want to elaborate on that, so I will leave it. Thank you very much.

Q6 Dr Doug Naysmith: I just want to ask something that is related to that fairly quickly, Chairman. One of the tools for deregulation and regulatory reform is this Committee and it can regulate and deregulate. The government has always seemed to be a little disappointed that we do not get through more deregulatory orders or regulatory reform orders as they would be now and they tend to blame this Committee and say that the Committee does not get through enough work. In fact we have never ever in six or seven years held up any orders that were before us; it is usually because the civil servants and the departments do not bring orders forward to us. Do you first of all agree with our analysis? One of the things that is sometimes said is that it is more sexy politically to tack something on to a Bill and do it through the House of Commons than coming to this committee. What do you think about that?

Mr Sargent: The answer is I think that part of what you are referring to is more the media, I think, than the government's perspective per se, so I do not agree that criticism lies with this Committee. What I would observe is that the legislative tools which have been put in place, of which this Committee is part of it, are only one part of how you deal with matters. Let me give you an example. If you look at the NAO report the priorities for people on the receiving end of regulation is to get effective guidance, to be consulted properly in the first place, to design the laws right in the first place, and we are having a significant amount of success; there are 741 measures that have been now identified that do not require that particular form of deregulation to happen. So it is there when it is needed but the reality is that generally we can achieve a finding, we can achieve the results without having to use fairly precious Parliamentary time, would be the observation I would make. But it is there because it is one of the half dozen tools that we use.

Mr Kohli: I think it would be honest to say that the time governments allocate to primary legislation is always scarce and some of the issues which are within our remit would struggle to get some of that time. That is not always true and indeed there are Bills before Parliament right now which will improve the experience of public sector workers through the public sector mergers.

Q7 Dr Doug Naysmith: My point is that this Committee could be used much more than it is currently and ought to be.

Mr Sargent: There are approximately 20 orders in planning of which I think one has already come through and four are in consultation - just finished consultation.

Q8 Chairman: Nowhere near us yet!

Mr Kohli: I think we are expecting one more to be laid in the next few days on health and safety.

Mr Sargent: Momentum will begin to pick up now.

Chairman: We hope so.

Q9 John Hemming: I think the big question is this one of what is regulatory reform and how do you deliver it. If we look at your list of items of success, for instance, some are clearly very good in terms that they are regulatory reforms; other ones, such as having fewer rail franchises, I am surprised that you got involved in that, I am surprised that anyone thinks that is a regulatory issue. As far as people outside the state are concerned, things like preventing people rolling cheeses down a hill because you cannot get insurance whilst they are rolling down hill to the bottom is an issue that indicates over regulation; similarly, censuring a member of staff who rescues somebody from falling down a cliff is an issue of regulation because if a voluntary organisation is pressurised by government into stopping its staff rescuing people when their job is to rescue people something is badly wrong. Within that context what is your strategic provision for dealing with regulatory reform?

Mr Sargent: If I can start with your first observations? There is a significant amount of bad reputation that regulation gets and some of it is caused by the vacuum. Health and Safety is quite often used as an excuse by people, which is nothing to do with regulation if people cancel events because they do not want to spend the money. So quite often one of the things that certainly concerns us is to sort out their education of regulation because it is a fundamental positive activity that happens. And misinformation has caused quite a lot of problems. Touching on areas where there are examples, the approach that we have to regulatory reform is to break it down into effectively five strands of activity. If we start with the stock of regulation the administrative burden project is an example of that where we look at what is there. We are looking, for example, at the moment, at doing a consumer overview of health and safety to see where it is that we can work with those departments and agencies. So the first thing is that we look at the stock and say what is it that now we know what we know and experience we have and evidence from talking to people in surveys that we can actually improve it? That is the first thing. One of the strongest drivers of perception regulation is the flow, the material that is flowing - new initiatives from Europe as well as from the UK. There we work with the departments and work with them to try to establish the principles and to make sure that they are going about it the right way. For example, the impact assessments, we introduced a new format for that back in the spring and is an example to make sure that that dialogue is straightforward and effective and it provides members of Parliament with the tools to challenge government effectively. The next bit is one that I feel is going to be the long-term success, which is the culture and the behaviours. In that area, for example, the people who are responsible on the ground - inspectors and people who are enforcing local government - that is the sharp end, so to speak, of regulation, and we will find the Hampton Review conclusions in that, and we will talk about that later on. In Europe about two-thirds of the regulation flow in many parts of the economy comes out of Europe and there we are engaging pretty effectively. For example, the recent 20,000 targets for administration costs there that we were very instrumental in helping to achieve. So we have broken it down to these constituent elements, so to speak, and have a strategy for each one.

Q10 John Hemming: This really does come down to the point that your organisation is clearly structured for dealing with the EU, dealing with government but not dealing with people outside government and issues like how high should somebody be allowed to go up a ladder has a wide impact - that is a regulatory process. It is unclear where that issue comes in but it has quite an impact on all sorts of things - like parades, for instance, involving road closures. All of these things link lots of different aspects of the government and everyone says, "Not me, guv, it is somebody else who is stopping this happening." It does appear that your priorities and your allocation of resources is to do with things within the state and not anything that is initiated outside; you are not doing inquiries into why can the scouts not parade any more.

Mr Kohli: I am not sure I would agree with that. We are absolutely responsible for the government's agenda to improve regulation and that includes the protection of regulation. So it is absolutely one of the things that I am concerned about within my organisation, how do we ensure that businesses and voluntary groups and public sector workers do not feel that health and safety laws, which I suspect is what you are referring to ---

Q11 John Hemming: Insurers as well.

Mr Kohli: ... act as a constraint, which is why we are working with the Health & Safety Executive to do a review of health and safety law.

Q12 John Hemming: You are working within the government, you are not actually working outside.

Mr Kohli: I am not sure I would agree with that either; as an organisation we have spent an incredible amount of time going out and about talking to real businesses on the ground. Many of my staff on a typical week - people have been out in the last few weeks to visit publicans to get a sense of the things that concern publicans. Not in the day, I hasten to add - rather in the evening! People have been out with regulators on inspections. I have personally done a number of inspections with regulators but I always make time to spend time with the business afterwards to get their sense of how it feels. So I just do not recognise that picture of our organisation.

Q13 John Hemming: Where things are initiated is the question. The implication of what you are saying is that although you may consult people about things that have been initiated within your organisation you are not having things initiated outside the government in a wider sense.

Mr Sargent: We are. Let me give you examples. Whenever we interact, as Jitinder said, we do a significant amount of visits and engagements with businesses and other organisations. For example, with a supermarket this week I have asked them to specifically come back to me with specific ideas about things that are barriers. So in the course of most weeks I will meet with businesses of various sizes and shapes and we then get correspondence from them and I challenge them because for me this is something I expect the business community to take as seriously as we do. We have put a portal in place for people who want to give us specific ideas and the emphasis is always on, "Do not just say that employment regulations are false, you have to be specific." So over the past 12 months we have had a significant amount of ideas through the portal and a significant amount of ideas from letters from specific individuals as opposed to lobby groups. I am always very interested to get to the actual people on the ground rather than necessarily lobby groups.

Q14 John Hemming: Is there a way of tracking that, which shows that these are ideas suggested outside the BRE and this is what has happened?

Mr Kohli: It is not something that we just track; it is something we want everyone to track.

Q15 John Hemming: Transparency.

Mr Kohli: And that it is visible to Parliament. One of our hopes is that Parliament will take a stronger role in scrutinising whether these things have been tackled well enough.

Mr Sargent: So we encourage people to put it on the portal and the answers are then public and if they are not any good then people can be criticised for not putting very good responses on that, and they have to do it within 90 days; and if they fail to meet 90 days it is not us who is saying it, it is up there.

Q16 Gordon Banks: Just on that. I have run a small business since 1986 and, quite frankly, I have been too busy running my business to become involved with an organisation such as yourself. So when you mention that you have a portal in place that is fine but how do you tell me when I am 450 miles away that you have a portal in place? Because you have not told me.

Mr Sargent: If you are a member of one of the trade associations from the CBI through to the local industry ones it would be very rare for it not to have been promoted through those associations, so that deals with those people who are active members. The more difficult challenge is getting to people who do not partake in any of these groups.

Q17 Gordon Banks: Which are actually a lot more than people who are members of any kind of organisation.

Mr Sargent: In my own business experience I come within that category because it covers a minority. Let me give you an example. There is an initiative, common commencement dates, so that new regulations come into effect on two dates of the year, and one is coming up very shortly, in April, and the idea there is to make people aware of everything that is coming out that is new and therefore will impact on them, and to do it in a coherent way rather than getting it piecemeal all over the place. We have given ourselves a challenge to reach a million businesses in the coming one, and we have identified various techniques to do it, emailing being one key way of doing it. These days it is a lot easier to find the tools to get through to someone like yourself - normally by email - and then to do it in a way which is coherent, like one page which then has links. So for us moving from the situation where we could not get through to a small business to getting through to a small business is a key target that we have and I would like to think that if we have this conversation in 12 months' time that I could actually prove to you that we had got through to one million businesses. I cannot at the moment but that is certainly part of our aim.

Q18 Gordon Banks: There is nothing worse, you will appreciate, than being bombarded with a range of information which is not relevant to your business - and I have had. Before you get to the bottom of page one and the end of page 12, which is actually relevant to you, it is in the bin or it has been deleted. I have argued that government and organisations such as yourselves should be able to target the regulation, to match the regulation that matches the business. So I am in the construction industry, I need to know about general business regulations but I also need to know specifics to the construction industry - I do not need to know about the disposal of fridges and freezers.

Mr Sargent: I agree.

Q19 Gordon Banks: I think that is the real target, how do you hold it down to make it relevant to the person that you are trying to reach so that they will first of all say, "This is important to absorb" and freely embrace it.

Mr Sargent: Again if I come back to the construction industry, it is a place that has fairly good lines of communication into people who work in it. I feel that the businesslink.gov.uk is obviously the tool that people are trying to view, are desperate to build up and try to make effective and I think a lot of the overhaul over the last 18 months on that has made it a more effective way of signing up for it themselves, who are not part of trade associations. I would like to feel, going forward, that that is going to be the most effective way for someone like yourself going on there and saying, "I am in this sector, this is what I want to know about," and it will turn up. That is one of the channels that we are using.

Q20 Gordon Banks: But I might not know what I want to know about.

Mr Sargent: I agree.

Mr Kohli: The way that that might work is it allows you to effectively describe what kind of organisation you are and then tell you the information that is of relevance to you. So I am sure it is not perfect and I am sure that there is a long way to go and it is certainly an area where government needs to improve, but it is absolutely trying to provide the kind of service that you are describing.

Q21 Phil Wilson: A couple of questions on this 25 per cent figure. What will be the annual savings on that? What does that equate to in money terms?

Mr Kohli: 3.5 billion.

Q22 Phil Wilson: That is in government?

Mr Kohli: No, for businesses and third sector organisations.

Q23 Phil Wilson: Government departments have identified annual savings of 3.5 billion worth of savings to the department.

Mr Kohli: No, the government departments are responsible for finding measures which deliver 3.5 billion of savings for businesses and third sector organisations, which is what the management exercise covers.

Mr Sargent: The government is obviously saving money itself as a result of it by not collecting information, but we have not identified it, that is not part of our job.

Q24 Phil Wilson: It was the way it read; I thought it was the government departments. One other question. One aspect in the memorandum is to improve transparency where you are going to publish annual total costs and benefits of new regulations based on cost benefit analysis from April this year. So by 2010 that will add up to a 25 per cent cut, is that right? And every year that you save so much money you get the 3.5 billion? So if in 2010 I look at that and say, "That is where the savings have been made"?

Mr Kohli: Let me try and explain the distinction - that there is a distinction. We are already committed and have been committed for some time for making the 3.5 billion savings absolutely transparent. In this document, of which I hope we have given you a copy or sent you a link, which was published just before Christmas, sets out all of the initiatives the government departments are undertaking in order to deliver the reductions towards their 3.5. This is just a summary of a series of longer documents written by other departments, and there is a particular table in here which says, for instance, that the Department for Culture, Media and Sport has identified measures which save 108 million out of their 343 million baseline for instance. So that will be very transparent. And after May 2010 as a government we should be able to demonstrate to Parliament and to the business community that we will have delivered the savings that we are talking about, this 3.5 billion number. What that line in that memorandum is referring to is something slightly different, which is that as a government we do not currently publish the overall cost of new regulations coming in beyond admin and the overall benefits of new regulations coming in. So for each individual regulation you can get hold of an impact assessment which will give you some sense of the costs and benefits and a much better sense of costs and benefits now than it did a year or two ago. What we are promising to do is to effectively tot up the totals of all those new regulations coming in - the costs and benefits - and to publish a series. The only country in the world that does something similar to that is the United States, who do so effectively for secondary legislation - they do a similar series - but they do not do it for all regulations. So we will be the first country in the world to do that kind of series, and that is beyond administrative burdens, that is for the whole of policy costs as well.

John Hemming: On the numbers again, just looking at the DVLA where you say that there is a 29 a year saving, my personal experience is that it takes me a lot more effort now to get a car taxed than it did five years ago.

Judy Mallaber: It takes two minutes.

 

Q25 Dr Doug Naysmith: Nonsense. It is the easiest thing in the world to tax your car.

Mr Sargent: It takes 60 seconds compared to an hour going to the post office.

Q26 John Hemming: The first thing, is that about regulatory reform? I would argue is it is not. Secondly, how you quantify those things is an interesting question.

Mr Sargent: The great thing with that particular example is that it is a very personal experience and I actually feel that the numbers are underestimated because if you take all of the businesses and all of the citizens who have to do that exercise the amount of time they can save is pretty phenomenal. If you think about the achievement, government very rarely gets credit for IT projects but that is taking two separate public sector databases and it is taking a private sector database live, any time of the day or night, and actually allowing you to do a transaction. So that is a phenomenal achievement and it rarely gets credit. But good service is actually better regulation. The fact that you can do something quicker and with less waste of time as far as I am concerned is better regulation. So good service is about better regulation.

Chairman: I am sure your car is taxed, Mr Hemming!

Q27 Judy Mallaber: Rick Haythornthwaite, Chairman of the Better Regulation Commission has described the impact assessment system as "the best leading indicator we have". So why did you decide to stop doing routine scrutiny of impact assessments?

Mr Sargent: Impact assessments, I will make two observations. The manner in which they were being prepared we felt needed improvement and greater transparency and a top sheet where Parliamentarians could take that top sheet and say, "We agree with these numbers or we do not and we can debate it." So the first thing we did was that we created a very transparent structure as of May last year for the impact assessments. The scrutiny of it is something that is done very much by people either on the receiving end of it or Parliamentarians or the press, so we do not feel that our job is to sit and look on a daily basis as to what has happened in that area. People make sure that they do them - we have managed to achieve pretty much 100 per cent across the board people doing them now - but scrutinising on a daily basis, we feel that other people are better placed than we are to do that.

Q28 Judy Mallaber: How do you know it is effective if you are not looking at them?

Mr Kohli: Let me be clear about what we do and do not do. When William and I arrived into the Better Regulation Executive we knew that impact assessment or, as it was then called, the regulatory impact assessment was an important tool of those in government who believed in better regulation, and it was important because it was the way to find out what the cost and benefits associated with a particular policy measure were - except it was not. We looked at them - and that is exactly what we did two and a bit years ago - we pulled out a few of them and we looked at them and we read them and we thought that actually you cannot find out what the cost and benefits are - they are all hidden away in complicated tables. And if we expect Ministers and Parliamentarians and outside stakeholders to really scrutinise this process then we have to make it simpler and more accessible because if even we, who are in government and paid to run this agenda, do not understand it how can we expect others to understand it? So what we have introduced is effectively one sheet which brings transparency to the system, so that it says that the overall costs of this measure are X and it tells you the net present value. I am assuming that when Rick is referring to looking to make a positive comment he is referring to the new system and not the old system. I do not know what date that comment was made.

Q29 Judy Mallaber: January 2006.

Mr Kohli: It is after we had talked to Rick about the new system and we had gone public and what it would look like. Let me get my facts right. Certainly when went to the Better Regulation Commission and said that we intend to overhaul the way that impact assessment works Rick was enthusiastic in telling us that this was a good thing and it would bring better transparency. That said, the UK seemed to be quite good, but we just did not think it worked. What do we in the BRE do on impact assessments? Where you have an impact assessment on a major measure the people in the BRE work very closely with the department to establish that the impact assessment data is accurate. What we do not want to do is to take away the responsibility from the department to get it right themselves. We found a couple of years ago that if a department was not very good at doing impact assessments it would give the impact assessments to the BRE and say, "What do you think?" and the BRE would say that they were not very good and would offer to rewrite them for them, and I think that just does not work; it does not give us the kind of culture change across Whitehall that we need, and what we really need in our view is pressure on departments where they fail to do it well and hopefully the new system will allow that to happen.

Q30 Judy Mallaber: So how are you going to assess whether the new system works if you are not analysing what is happening within those assessments? And who is it that is now responsible - rather than the department just monitoring itself, as it were - for scrutinising those assessments to make sure that they are accurate?

Mr Sargent: The key dialogue we have with the department is the tool that we use quite often - the dialogue. So we are engaging specifically as the document is being created by the department, before it gets made public. Once it gets made public there is not a lot of opportunity for doing that. In addition to that the NAO is obviously then taking a view on the quality of impact assessments, etcetera. But we have a very strong opinion when we are dealing with departments as to what we think about the numbers, the quality of what they have done and that is generally the way we engage.

Q31 Judy Mallaber: So you are saying that it is up to the NAO but certainly if you are sat on a Committee it is quite hard to look at an impact assessment and to really know whether it is right or it is not right or it is going to turn out to have been inaccurate.

Mr Sargent: With any significant impact assessment we will have a strong dialogue with that department and if we felt it was inappropriate and no good we would certainly challenge them and use our internal processes.

Q32 Judy Mallaber: Following Lorely's line of questioning, is there any mechanism for reviewing assessments in their implementation to see whether they turn out to have been correct? If so, what is that mechanism and what is your role, if any, in relation to that?

Mr Kohli: The new impact assessment format has a question of it which says when will the policy be reviewed to establish the actual costs and benefits and the achievement of the desired effects. So departments for the first time are required to say publicly the date on which that will happen. This format has not been in place very long so we have not yet reached any of those dates, but as we do so we would expect both the BRE within government, the department themselves and the stakeholders affected by regulation to effectively hold a department's feet to the fire.

Q33 Judy Mallaber: And you would have a role in making sure that that has happened and that it is an adequate assessment of the implementation?

Mr Kohli: I think it is fair to say that we would have a role; I do not think it is fair to say that we would have the only role. We see this as a partnership between all the people who are affected by the regulation and responsible for delivering better regulation.

Q34 Judy Mallaber: So is no one overall place that you would say has that responsibility because the difficulty is often that analysis falls between a number of different stools and everyone one is expecting everyone else to report what has happened.

Mr Kohli: We are responsible for ensuring that the government brings into force regulations where the benefits justify the cost and regulation is absolutely essential. If it transpires after a number of years that in a particular area those assumptions were not true then we are responsible for those areas. Let me give you an example, which is an easier way of getting into the issue. A few years ago the former DTI was concerned about the number of employment disputes that were going to tribunal and in their view they were going needlessly. Employers and trade unions both felt that there was a problem that needed addressing. Therefore, what they invented was an idea that before a dispute can go to a tribunal employers should be required and employees should be required to try and settle disputes within the workplace, which is a good idea. The DTI invented a three-stage procedure for how these disputes should be resolved and there was a requirement that employers followed this three-stage procedure. This process unfortunately did not work. What actually happened was that the disputes within workplaces became overly formal too quickly and too many of these cases ended up in court and employers found themselves having procedural problems with the process they had followed in the workplace and employees found themselves in a tribunal situation when they did not want that and what they actually wanted was some form of informal redress - in some cases all they wanted was for their employer to say sorry. Very simple human things in the workplace. When we set up the BRE we spent a lot of time talking to businesses and one of the things that businesses told us was that this was an area which really concerned them; they were really worried that on the ground this was causing more harm than good. So we did some research, we did some thinking about it, we went to the department and we persuaded the department - we were more or less pushing at an open door - that this was not the right way of doing things, and we came up with a different way of doing things. Indeed, the Employment Bill currently before Parliament addresses this issue and effectively gets rid of this very formal requirement and replaces it with an informal way of approaching it. That is an example of a post-implementation review where a policy was done in good faith, did not work - and sometimes that happens - and the department, encouraged by us, realised that it did not work and has come up with a different way of doing things. And it happened to save businesses a lot of money too and I think personally it will save employees a lot of aggravation too. So that is an example of where post-implementation can work, and those examples will continue in the future.

Q35 Judy Mallaber: That is helpful. In terms of when impact assessments have just been done though have there been any recent ones that you can recall where the fact of doing the impact assessment resulted in a draft regulation being abandoned? Has it had an impact at that stage?

Mr Sargent: I can give you an example of one where it dramatically changed and made it easier, which was the extension of the learning age from 16 to 17 to 18. That was one of the very early examples of a policy which used this approach, and the process and the thinking ended up with significant savings; and when the policy came out, which you would normally have expected the business world to feel a bit uncomfortable about it because it very much impacted on the people being employed in that age group, the business community was very comfortable with the end result and the policy that was designed. So the policy was not abandoned but it was in the course of the process of being designed altered quite a bit and the end result was government and the business community were in a very comfortable place together.

Q36 Judy Mallaber: So by doing the impact assessment they end up with a better policy?

Mr Sargent: Absolutely, and that is a really powerful example. Unusually, it saves money on both sides of the fence.

Q37 Judy Mallaber: Is it possible for you to give us more details of that? I would be very interested to know more details of that as an example to use?

Mr Sargent: Yes.

Q38 Judy Mallaber: On the question of departmental simplification plans have you asked for any wholesale revisions of those or have you been content with those that have come forward?

Mr Sargent: The plans are the responsibility of the department, is the starting point. The way we are structured is that we have teams that face departments and so we engage in a dialogue with them. One of the things that we do in addition to our dialogue with them - so it is not about saying that we think the plan is awful and we want to reject it because it does not get to that stage because we are in very early with the dialogue. That is the first observation I would make. So that was the first thing that happened. The second thing is that we have encouraged parties to share the draft plan very early on. I in turn have gone to the business community and said, "Please do not publicly criticise a draft plan while it is a draft plan because I am trying to encourage officials and Ministers to share their thinking about where they are heading at draft stage and I wanted to give you a draft when it is a very rough draft where you guys can say, 'This is important to us and this is not and actually we do not believe your numbers there' or 'These numbers are fine.'" So that the department has guidance and help from outsiders who feel the impact. It is very different from a plan without the people who are on the receiving end being part of the process. So I cannot think of an example where the word wholesale rejection will have happened.

Q39 Judy Mallaber: At what stage do you see the plans?

Mr Sargent: Very early on.

Q40 Judy Mallaber: You see them at a very early stage.

Mr Sargent: Very early on, when they are just saying, "Here is a list of things that we think might be useful for us to be doing"; so we are seeing them probably within the first few weeks of the ideas beginning to emerge in plans.

Mr Kohli: To give you an example, sometimes even before the plans have been written we are engaged in that process. I was invited by Dame Deirdre Hutton to speak at an event which the Food Standards Agency held with its stakeholders, to effectively brainstorm ideas of the things on which the Food Standards Agency should focus energy, and a large number of people affected by the FSA's regulations were in the room and that was an event at which BRE staff were present as well as Food Standards Agency staff.

Q41 Judy Mallaber: Do you regard it as your job to make suggestions and say, "We are not sure about that" or is your job more to mediate and to make sure that they are talking to the right people?

Mr Sargent: Across the piece. Jitinder referred to the dispute resolution as an example of one where we more actively did some research and worked with the department on that. One of the things I am particularly encouraged about, if I look at the development of the second year's plans really is that if you think about it we have a situation now where previously people regulated and brought about legislation as an activity that they could perform in and do well in and it would be well regarded. Now we have a significant amount of brainpower in a given year being spent on what can we do to simply, what can we do to clarify, what can we do to improve things, as another line of activity, which the plans are all about.

Q42 Chairman: So your message to the external stakeholders is that the drafts are genuine drafts and they are genuinely out there for consultation?

Mr Sargent: Absolutely. And they do change as they evolve.

Q43 Gordon Banks: It is really good to hear about your involvement in the simplification plans at different levels and that they are not just something that are churned out by the department and then you have a reactive role to play, so from my point of view that is very heartening. Do you think that you have a role in training civil servants to draft regulations so that the more pertinent interests of business, especially small businesses, can be taken into account? And if that is not your role whose role is it? I suppose it goes back to the other question I was asking, upside down, if you are trying to get business engaged after the complying stage, how do you get people like me, before I came here, to be engaged at a very, very early consultative stage and to buy in to what you are trying to do so that I take some kind of ownership of this?

Mr Sargent: I do perceive it as our responsibility in terms of training. It is part of the culture to try and achieve that. Jitinder will give you more details of the specific programmes we do, but the short answer is that I do perceive it as an important part of our role.

Mr Kohli: We cannot achieve the kind of culture change that we are talking about across government departments and regulators if we do not work very closely with them to help them to make that journey. Formal training is one route to do that - it is not the only route to do that but it is certainly one. We have put on formal training over the last year or so in two areas - one is around impact assessment and a new impact assessment to help people genuinely work out what the cost and benefits of the new regulations are; and also on how to use a standard cost model which forms a basis of the administrative burden measurement exercise. So on those two areas we have done training. The main training provider for most civil servants is the National School of Government and we work pretty closely with them on ensuring that better regulation schemes are in their training programmes. I have had a couple of meetings with them where we are pushing at an open door and they are very keen to get the message across. The one thing I would add to that is that in the last few weeks we have announced that the bodies that Rick Haythornthwaite chairs, the Better Regulation Commission as was, is to be replaced by a new body called the Risk and Regulation Advisory Council, and one of its jobs is to work with both Ministers and senior civil servants to develop a better understanding of public risk. Certainly one of the things that they will be doing is running workshops to help Ministers and senior civil servants to understand what good and poor practice is, and that is in their terms of reference.

Q44 Gordon Banks: It is hard to measure how a regulation or how a piece of legislation that has a certain level of burden on an industry or charities, etcetera is good and acceptable, as opposed to what might have come out of the department if your involvement had not taken place, because you do not know what might have come out of that department so you have nothing to measure it against really. So it is very, very difficult and that is where the feel bit comes into it, when you get back to businesses and people who are faced with these things, that they feel things are better because sometimes you are not in a position to actually measure what might have been because if you do not know you do not know.

Mr Sargent: One of my personal pet projects - and I did this when I was chairing an advisory body for government as opposed to now operating within government - was the idea that I was very anxious that civil servants spent time in the community they regulated. It was an obsession of mine, so we did a thing called A Week in Business, in which the Department of Trade, as then, and HMRC and various others participated, and I persuaded individuals at the top to require their top civil servants to do that, and what is now in the better business enterprise regulatory forum it is the requirement that people do this week in business. I feel that if you are regulating health that you should be spending a week in it as opposed to just turn up for two hours and walk in and walk out. My own team has an obligation to spend time with people so that we really understand it. For me it is a cultural thing because if you are really busy and just go and hang out with a small business - you go to a newsagent and hang out for a day it feels like a waste of time and so you need the people at the top to say, "It is okay to stand behind the counter for the entire day in a shop." It does not feel like real work and so people need that permission to do that. That is beginning to happen - it is not purely that which we do - and there is definitely a culture that that is happening, five per cent, ten per cent, whatever it is, that it is happening. But people need permission to do things like that.

Q45 Gordon Banks: It might not be a burden that is there from six o'clock in the morning but it might be a burden that comes on at eight o'clock at night because of some regulation. Moving on to something you mentioned earlier, Mr Sargent, was the relationship with the EU and you mentioned that you had had some successes. The British Chamber of Commerce seems to say that there is a lack of synchronisation between the EU and Member State impact assessment systems. Is that something with which you would not go along?

Mr Sargent: The EU is a distance behind the UK in terms of its agenda, frankly. I think the Barroso Commission and Catherine Day, who is now the Cabinet Secretary, are two individuals who really get the agendas. We start with the fact that there are now two individuals at the top of the political leadership and civil service leadership who are personally are committed to this and that is quite important. The structures by which people work have a distance to go. They have just started their journey on impact assessments and they are where we were - if you go back to our old regulatory impact assessments - they are in a place where they have yet to get clarity and make these become absorbed and so forth, but they are doing it. The first thing that the Barroso Commission did when it came in was to look at the workload and take a significant amount out and to say, "We are just not going to do this stuff," and that was quite a unique change. So if you look at the Community, particularly the administrative burdens project on that, we are in danger of having a European-wide standard cost model by which you start to measure costs and the Commission has now bought into that and is using the same methodology. So I think we have moved significantly, particularly in the last 18 months, to a situation where people want to do it; they need to get everybody else on board, and I think the big success that we had in getting involved in the Commission accepting the 25 per cent target was that all the nations accepted variations on the target as well. So we have a situation now that is pretty common across the nations of Europe as well as the Commission.

Q46 Gordon Banks: So who in your organisation has a responsibility for liaising with the EU Commission?

Mr Kohli: We have a Director of European International.

Q47 Gordon Banks: You have a director?

Mr Kohli: He sits on the Commission's high level group, he talks to other Member States and he and his team were enormously successful in persuading the European Council last year in the spring - not the Commission but the Council - to agree to the 25 per cent target at the EU level, which effectively meant getting 27 Member States to sign up to it.

Q48 Gordon Banks: This is a question from ignorance, I am afraid, but do our European counterparts all have organisations such as yourself?

Mr Sargent: It varies.

Q49 Gordon Banks: Because it is difficult to speak to someone if you have nobody to speak to.

Mr Sargent: Let me give a personal observation. Unfortunately our colleague who is responsible for Europe would have more facts to hand but I can give you a personal impression. If we start with the business community it is not as an effective a voice in Brussels because it is not as well organised. We start with the fact that government needs to do its bit but the reality is that the business community needs to do its bit and one of the things that European officials complain about most often is that they very rarely see the business people who are being regulated talking to them. So there is that lack of connection going on, which hopefully is improving. So you start with that end of the equation. Jitinder, myself, as well as my colleague Andrew, are off to Paris in a few weeks' time to meet with the French who are quite influential and have perspectives on this. We met the Chairman in Berlin where we were having quite an active dialogue with quite a few of the member and in that place, for example, there were 56 countries, which included every Member in that. So literally in 24 months we have gone from a situation where we would not have had many people to talk to, only the Dutch, the Danes, the Germans and the French, to a situation now where every country has its equivalent of myself and Jitinder, and we turn up at events and we have a dialogue and communicate, and not just Europe but there were 56 countries at that, and when I went to one a year earlier there were 29. So it is fairly fast moving.

Mr Kohli: So in a couple of years there are two countries that had done the measurement exercise on which we were embarking and both the Netherlands and Denmark are relatively small countries in comparison to our economy. Since then Sweden, Germany, Denmark, the Czech Republic and Austria have done measurement exercises and 11 other Member States have done partial exercises and France is finishing its exercise in the next couple of months. It is a movement which is going on across Europe and the UK is one of the leading lights. So it is one area where we have persuaded our counterparts in the Member States to get involved.

Q50 Dr Doug Naysmith: Mr Sargent, your organisation previously under a Public Service Agreement required an improvement in the perception of regulation by April 2008. But in the memorandum you sent us the perception of regulation is still pretty poor. Do you think there has been any achievement at all of that original requirement?

Mr Sargent: I think it is the area in which we are most challenged. Changing perception in a large multinational or in government is the most difficult thing to achieve.

Q51 Dr Doug Naysmith: Do you think it was achieved at all or are you still where you were?

Mr Sargent: I think it is partially achieved but I think it has a long way to go, is the short answer.

Mr Kohli: We have only started measuring and we only have one measurement, which is from the National Audit Office survey fieldwork carried out about a year go. They are back in the field right now - I say they are back in the field, I will be corrected by the NAO if I am wrong - so we will get a second data point in the coming months.

Q52 Dr Doug Naysmith: The paragraph in your memorandum was pretty bleak and said that there was not much improvement.

Mr Kohli: We have a mountain to climb in addressing perception. If we are going to succeed we are going to have to take real costs out of the system which businesses genuinely noticed - that is what the administrative burden programme will do - and we also have to address other issues that businesses find frustrating and irritating. So it is not just about a numbers game, it also has to be about focusing on the things that people find frustrating. Could I give two examples, would that be helpful?

Q53 Dr Doug Naysmith: Could I just say something to you first, and then you can give me the examples. Sir David Arculus said that success should be judged by whether results are felt on the ground, not by whether departments think they have done a good job - and that just makes common sense - and the government will have failed if a difference cannot be felt. I am not sure that "felt" is a useful word. How do you measure feeling? You can feel good one day, get up the next day and feel awful - feelings change in between. How are you going to measure that? What plans are there to improve business perception?

Mr Kohli: The central measure that we are using, the NAO asked the question in their survey which is, "Do you agree with the statement that most regulation is fair and proportionate?" That feels to us to be a reasonable thing to try and alter. I do not think we are going to get to a world where business ---

Q54 Dr Doug Naysmith: What is the proportion now that says that it is not fair and proportionate?

Mr Kohli: 46 per cent against 39 who agree. So we have a minus seven, which is probably less bad than people think.

Q55 Dr Doug Naysmith: That is a lot better than predicted.

Mr Kohli: But certainly success for our organisation and our endeavour has to be moving those numbers to a more positive light. The department still has strategic objectives which measures that.

Mr Sargent: The NAO is just doing its second one so every year you will get a benchmark and so every report has to be benchmarked. Local government obviously is one of the areas which business feels regulation has been expecting that and that measurement has been embedded there as well. So we have a situation where we put structures in place that independent people will be verifying whether these things are happening or not.

Q56 Dr Doug Naysmith: The Committee asked for an explanation of why the initiatives you selected for implementation were chosen in preference to others, and for evidence of their potential cost effectiveness and expected outcomes. We were rather disappointed that you did not actually provide us with that information so now is your chance. What was your reasoning behind your selection of the initiatives you did select and what evidence did you use to support the choices that you made?

Mr Sargent: You would have to look at each individual one but let me give you ---

Q57 Dr Doug Naysmith: What sort of evidence?

Mr Sargent: Let me give you examples. We started with looking at reviews and surveys that had been done by both government as well as independent groups of people as to what it is that is worrying businesses. If you look at the NAO report they talk about lack of clarity with guidance, lack of understanding of things, so that is one example. We did lots of visits, we did lots of focus groups; we looked at surveys both internal and external to government. The administrative burdens project, for example, is one of the benefits as it tells you exactly where the costs are falling down so if you have somebody who has a billion pound cost they might think, "Right, we want to put energy in there." So a whole collection of things. We would have to give you a very long list to say every single survey that we used and every single piece of evidence that we used, but generally in broad terms they involve talking to people who are on the receiving end. We can give you some examples.

Mr Kohli: Can I give you one example, which would help to elucidate here? First of all, the administrative burden exercise gave us a great deal of data; it gave us 20,000 lines on a spreadsheet and each line was a separate requirement in law and for each of them it told us what the cost was and how that cost was comprised. One of the things it told us that we found slightly surprising was that a higher proportion than we had expected of the costs arise from requirements in law to give information to others, including to consumers, and when we talked to our Dutch and Danish counterparts they were surprised that our numbers were as high as they were. Our overall numbers are not high but they were surprised that the ratio was as it was. So we thought, let us try and understand what is driving those numbers and what are the areas where these kinds of regulations work and where they do not work. So we commissioned a project working with the National Consumer Council to say where are these requirements of consumer information helpful or unhelpful. We will send you a copy of this report - this is the report that was published jointly with the National Consumer Council, and you will see the message very clearly here on the front cover. Sometimes they work but actually 52 different safety requirements on a toaster probably does not help the consumer of the toaster and actually gives regulation a bad name, which is one of the things I am worried about, going straight back to your perception point. This is one initiative where that is where the evidence came from. So in order to do this work we got a lot more evidence; we talked to citizens and said to them, "Which requirements work for you; which requirements do not work for you?" and out of that comes an understanding of how to do it better and a guide to policy makers on how to get it right next time. That is an example of an initiative and the thought processes relating to it.

Q58 Dr Doug Naysmith: What I was trying to get at was the underlying evidence that you use. What enables you to make these decisions? For instance, there are what people would call - departments call sometimes - low hanging fruit, easy things to get a hold of and demonstrate that you have done something. Obviously you need to do some of those because they are there and they need to be done, but that could tend to obscure the long-term, more strategic things that are much harder to work at but will give a much better overall impression in the long-run. So how do you choose between these?

Mr Sargent: If we go back to the administrative burdens project, which is one example, that was very clear because there were four or five areas where fundamentally 80 per cent, 90 per cent of the costs fell so straight away you said to yourself, "If you deal with that 80 to 90 per cent across the four areas we are likely to have a bigger impact." So straight away out of the 20,000 we have narrowed it down to a few hundred areas of specific obligations. That is an example of being very specific. The low hanging fruit is one area; the low hanging fruit quite often tends to be what one would call irritants - things that wind people up, they do not know why they are doing it, and they are quite easy to deal with and quite often cost very little money, but they drive perception. If you take consumer law review and health and safety review that we are in the middle of at the moment that is an example that we know if we can get to the bottom of that, understand it and do something there then we will have a significant impact. So that is why we chose those two areas, that is why we chose dispute resolution because we knew that employment is the single biggest area where people struggle in managing their business, particularly if you are a smaller firm, and within that the bit that was really causing you a problem was disputes with your employees and the fact that they were really cumbersome, awkward to deal with and leading to bad relations. So that is why we tackled that in the course of the last year. So if you look at our reviews and our programmes they very much start with where we are going to have the biggest impact - they work through there; and at the same time what are the things that are winding people up, and quite often they are slightly separate.

Mr Kohli: We are not terribly interested in things that are short-term and sound good. That is not the kind of organisation we are trying to be, and that is why this is a long-term agenda.

Q59 Dr Doug Naysmith: Do the similar sort of principles apply to the 700 initiatives in simplifying the departmental procedures as well? How do you decide what should be given priority?

Mr Sargent: There are two things there. We ask them to do a plan which says, "We think we can achieve this," and that plan is made up of a raft of things - some big, some small. Some of the things that are achievable. I am very anxious that people look at things that they can achieve quickly, easily and effectively and in the short-term, so out of the 741 they delivered 288 in the first ten months. Some of them are small, some of them are quite big - they vary. While that is going on and within those plans, if you look at the Business Enterprise and Regulatory Reform Department quite a lot of the stuff in there is big and long-term stuff. So if you analyse the plans they are a mixture of both; they are a mixture of what they can achieve now, this month, next month, the month after and the sort of stuff that might take one, two, three years to achieve. But we as the overall body responsible for looking across government use the data that we have collected and we look at the research and look at the NAO surveys and say, "This is what people are worrying about and if you are not doing something about it we will be on your case." So if, for example, if the Health & Safety Executive was not interested in dealing with things we would be on their case. The reality is that there is nobody that we do business with that does not want to do something about it because it helps them.

Q60 Dr Doug Naysmith: Your new PSA targets are - and there are three of the major ones - one, to raise the productivity of the UK economy - and that would be a task in itself for most people - two, to deliver the conditions of business success in the UK; and three, to improve the economic performance of all English regions and reducing the gap in economic growth rates between regions. A very substantial agenda, so how do you intend to implement these public service targets? What are your key priorities for the future and how do you intend to communicate them?

Mr Sargent: I can only talk obviously within the regulatory reform bit because obviously we are a part of the department which actually has the PSA, which are generally across government anyway, most of the PSAs. The manner in which we are dealing with this is what we laid out earlier, in which we broke down the strands of activity. If we take productivity as a target the work that we do basically removes time spent or removes costs spent inappropriately and frees them up to do other things. There are various international studies that say, for example, if we save a business 500 on a particular set of forms - take the Health & Safety Executive's ones, which have been halved - that if you do not have to do that you now have time to do something else, generally sell more or create a new product or innovate, spending more time thinking how can I improve my service and my product. So for us it is very clear that the money that people save in not having to do whatever they are doing, either employing outsiders or spending their own time on it, translates straight through into some other activity, which is more productive and has added value. I think that is how we deliver the productivity agenda. The same applies as you go through the other targets that you referred to.

Mr Kohli: Within delivering the conditions of business success there are specific indicators on better regulation which obviously we lead on for government, but we are of course a government unit and our role is to encourage others and get others to do the necessary work to make the changes that we want to happen.

Q61 Dr Doug Naysmith: How do you intend to communicate what you are doing? I know we have touched on it a lot already.

Mr Sargent: There are two types of communication. There is the communication we have to do across government, within government, with Ministers, with the civil service and we have a fairly effective line of communication. We have better relation officials in each of the departments; there is a better relations Minister, there is a network of Ministers, there is a network of officials. In turn there is our own communications with interested parties out there, whether it is with the National Consumer Council or the CBI who we meet regularly, so the internal and the infrastructural people are quite close to the action, so to speak and we are pretty easily tied into it. If you look at any diary in any given week you will see these monthly directions, so there is that form. The communication with the community at large, who are more difficult to get to, range from the national media, which to me is one of the most important constituents that I am trying to use as they have a huge effect on driving the desire or the needs for regulation quite often, and we engage with them quite actively. We are quite keen on the local press and trade press because we find that those are more usable channels to communicate directly with people in a way that means something to people and so that is the bit that we are quite keen on, and local radio. When we did the simplification plans before Christmas I think the most successful way of getting people to listen was by radios, which were easy to get on to 20 or 30 local radio stations and just talk.

Q62 Dr Doug Naysmith: Finally, can I ask you how many employees you have to bring about all this change?

Mr Kohli: About 90.

Dr Doug Naysmith: Good luck!

Chairman: Gentlemen, it has been a very helpful session and I am grateful to you for your time. I guess when you have succeeded in bringing about the cultural changes to which you refer I suppose the final task will be to abolish yourselves! I thank you for your attendance and for being so frank with us. We will be following up some of the points and pressing you for some more detail, but we are grateful for your cooperation.