Memorandum from Institute of Chartered Accountants in England and Wales (ICAEW)

 

Themes and Trends in Regulatory Reform

 

 

INTRODUCTION

 

The Institute of Chartered Accountants in England and Wales (ICAEW) welcomes the opportunity to submit evidence in response to this Regulatory Reform Committee inquiry. As a public interest body, the ICAEW is committed to working with Government and regulators, as well as wider market participants, in order to improve regulation and help restore economic confidence.

 

We were pleased to be able to contribute to the Regulatory Reform Committee's inquiry into 'Getting Results: The Better Regulation Executive (BRE) and the Impact of the Regulatory Reform Agenda" in 2008.

 

EXECUTIVE SUMMARY

 

· The majority of businesses questioned in the ICAEW 2008 Global Enterprise survey believe that the UK regulatory and taxation environment is not business friendly. Members in the EU were only marginally more positive regarding their regulatory and taxation business environment, but a clear majority of those in the US and the Far East thought their environment business friendly.

 

· The Global Enterprise survey measured the annual cost to business of implementing new legislation in 2007/8 at an estimated £11.3 billion. ICAEW research indicates that the burden of regulation falls disproportionately on Small and Medium Sized Enterprises.

 

· The ICAEW believes the current UK regulatory reform agenda has only achieved limited success, but that much of the framework for an effective regulatory regime is already in place.

 

· The ICAEW believes that the UK regulatory framework would be improved by the following measures:

 

· The Better Regulation Executive (BRE) should be responsible for signing off proposals (particularly the Impact Assessment) for legislative changes before they get into the legislative programme. Alternatively the role could be carried out by the National Audit Office. If the role remains with the BRE it should be moved to HM Treasury or back to the Cabinet office to enhance its ability to challenge departments.

· The Impact Assessment system introduced in April 2008 would benefit from further external input into the assessment of the costs and benefits of proposals.

· The Government should proceed with the introduction of regulatory budgets to help departments to focus on priorities.

 

· In the current economic climate the ICAEW supports calls from within Government for a moratorium on legislation and legislative announcements, which have not yet been implemented that will entail additional costs for business. As a minimum, the ICAEW believes that there should be a moratorium on all Employment law and Health and Safety changes until the economy is in recovery.

 

· Regulation can also have 'unintended consequences'. ICAEW research has shown that regulation can have potentially negative effects on economic efficiency, in particular on entrepreneurship and competition, for example, by deterring new entrants to a marketplace.

 

· The ICAEW believes it is critical that the G20 continues, in partnership, to lead the regulatory response to the financial crisis, taking all necessary steps to tackle problems whilst refraining from taking competing national or regional measures, which could undermine the long-term benefits of globalisation.

 

· The ICAEW welcomes the BRE's and Department for Business, Enterprise and Regulatory Reform (BERR) leadership in the context of the European better regulation agenda, but would encourage greater partnership and sharing of experience between better regulation authorities in EU member states and with the European Commission itself.

 

· The ICAEW recommends that the Government accepts the recommendations of the Anderson Review and implements the recommendations as soon as possible.

 

BACKGROUND

 

1. Successive Governments have sought to address the regulatory burden on business. Early UK initiatives included the Better Regulation Task Force (later Commission). The Conservative Government had a 'deregulation' agenda, which became a 'better regulation' agenda under the 1997 Labour Government. The current UK Government agenda on regulation has been devised around the Hampton Review for HM Treasury (Reducing administrative burdens: effective inspection and enforcement, March 2005) and the Better Regulation Task Force report to the Prime Minister also in March 2005 'Regulation - Less is More: Reducing burdens, improving outcomes'.

 

2. The 'Less is More' report advocated that the government should:

 

· Measure the administrative burden which Government imposes on business.

· Commit to a target for reducing administrative burdens.

· Set up the necessary organisational structure to oversee the process of targeted administrative burden reduction.

 

3. The 'Less is More' report followed a feasibility study on introducing the system of targeted administrative burden reduction adopted by the Netherlands. The other major recommendation of the report was for the government to introduce a 'One in, One out' approach to manage and reduce regulatory burdens. It argued that 'If ministers do want new laws they will need to prioritize and drop other proposals - thus stemming the flow, or repeal existing laws - thus reducing the stock'.

 

4. The Hampton Review suggested that "Administrative burdens are the costs that come from enforcement activities. If regulators operate effectively, and use the best evidence or programme their work, administrative burdens on compliant businesses can be reduced while maintaining or even improving regulatory outcomes". It recommended:

 

· Comprehensive risk assessment should be the foundation of all regulators enforcement programmes.

· There should be no inspections without a reason, and data requirements for less risky businesses should be lower than for riskier businesses.

· Resources released from unnecessary inspections should be redirected towards advice to improve compliance.

· There should be fewer, simpler forms.

· Data requirements including design of forms, should be co-ordinated across regulators.

· When new regulations are being devised, Departments should plan to ensure enforcement can be as efficient as possible, and follows the principles of the report.

· Thirty-one national regulators should be reduced to seven or more thematic bodies.

 

5. The UK Government accepted the recommendation of the 'Less is More' report and committed through the Administrative Burdens Reduction Programme (the Programme) to reduce the administrative burden imposed by regulations on private and third sectors by 25% by 2010. At EU level, a similar target (25% by 2012) was endorsed by the European Council in March 2007. The Better Regulation Executive (BRE) is responsible for co-ordination of delivery of the Programme across departments and regulators, as part of a broader agenda to reform and improve the regulatory environment and to provide the best possible conditions for business success. Progress in implementing the Programme is examined in an annual report by the National Audit Office. The Government also accepted the recommendations of the Hampton Review.

6. These two initiatives formed the basis of the Government's current 'Regulatory Reform Agenda' which has four main components:

 

· Simplify and modernise existing regulation (principally through administrative burdens reduction).

· Change attitudes and approaches to regulation to become more risk based.

· Improve the design of new regulations and how they are communicated.

· Work across Europe to improve the quality of European regulation.

 

Is the current Regulatory Reform Agenda succeeding?

 

7. In the 2008 BRE report 'Making Your Life Simpler: Simplification Plans, A Summary', Lord Mandelson, Secretary of State for the Department of Business, Enterprise and Regulatory Reform (BERR) stated, 'We are on track to meet our target of achieving approximately £3.4bn of net annual savings for business by 2010'.

 

8. However, evidence from the National Audit Office (NAO) report 'The Administrative Burdens Reduction Programme', 2008 found 'only two percent of businesses stated it had become easier to comply with regulation over the past 12 months, 30% stated it had become more difficult, and 66% stated it had stayed about the same. One percent of businesses stated that complying with regulation had become less time consuming while 40% stated that it took longer and 57% stated it had stayed about the same'.

 

9. ICAEW research supports NAO report findings that there has been little significant improvement in the burden regulation places on business. The ICAEW annual Enterprise Survey, now in its twelfth year, draws upon the expertise of our members working at the heart of business. The 2008 report, includes research from chartered accountants working in the EU, Far East and the US, giving a global perspective.

 

10. The majority of businesses surveyed by the ICAEW believe that the UK regulatory and taxation environment is not business-friendly. Just over half (53%) of businesses in the survey say that the regulatory and taxation environment in the UK is not ('not very' or 'not at all') business-friendly. Fewer then half of businesses in the UK and the rest of the EU consider the regulatory and taxation environment under which they operate to be business-friendly. This contrasts with two-thirds of US businesses and approaching 90% of those in the Far East Countries.

 

These findings are drawn from the following chart

 

 

Base: All respondents

Don't know not shown

 

 

 

11. Businesses in the UK are more likely than those in the EU, US and Far East to consider that their operation and development are hindered by employment legislation, employment tax, business tax changes, health & safety regulation, environment law, planning regulations and Corporate Social Responsibility reporting requirements. However, they are less likely than those in the US to feel that they are hindered by corporate governance requirements and financial reporting requirements. In contrast, businesses in the Far East, consider their regulatory regime a help to their operation and development rather than a hindrance.

 

12. Business owners complain about regulation, because it involves the diversion of scarce resources away from productive, profit-generating activities and towards the discovery, understanding of, and compliance with regulations. In the 2008 Enterprise survey 70% of the cost of implementing new legislation in the UK in 2007/8 was borne by Micro businesses (those businesses with 9 or less employees).

 

13. Regulation can also have 'unintended consequences'. A report 'Regulation in the Marketplace: an Economic Literature Review' by cebr, an Independent Research Consultancy, for the ICAEW has shown that regulation can have potentially negative effects on economic efficiency. These negative effects arise through the impact of regulation on entrepreneurship and competition in particular. A preponderance of regulation that acts as a barrier to the free operation of businesses, both in theory and in practice, leads to a reduction of the number of firms entering the marketplace and a consequential lessening of competitive pressures.

 

14. Therefore, although regulation is often intended to correct market failures, it is important to realise that there may be a trade-off between these goals and economic efficiency. Hence, overbearing regulation can diminish competition and hold back entrepreneurship. Therefore, the impact of new and existing regulations on businesses - especially SMEs - needs to be considered thoroughly.

 

15. The ICAEW believes that the depreciation in the value of Sterling has afforded the UK an opportunity to emerge from the current recession more quickly through a significant boost in its exports and foreign currency earnings. However, if UK businesses are placed at a competitive disadvantage through burdensome regulations, that business opportunity will soon evaporate.

 

Departmental regulatory budgets

 

16. In August 2008 John Hutton, the then BERR Secretary of State published proposals to improve the regulatory regime through a system of regulatory budgets. The document (Regulatory Budgets: A Consultation Document) stated;

 

'As a government we have already made great progress in improving our regulatory regime. The UK is recognised as a world leader in better regulation and ranked by the World Bank as one of the top places to do business internationally. But we want to go further, which is why we are consulting on the idea of introducing a system of regulatory budgets to make explicit the costs and benefits of new regulations. Introducing Regulatory Budgets would be a radical new development, a world first in the management of regulation. We need to make sure that any system would work for all those affected by regulation which is why we are seeking views on key issues'.

 

17. The regulatory budgets proposal is a variant of the second proposal in the 'Less is More' report 'One in, One out' system of 'stemming the flow, or repeal existing laws - thus reducing the stock'. The regulatory budgets consultation stated, 'A regulatory budget system will provide better prioritised regulation by government departments; greater transparency on the impact of regulation and better accounting of the opportunity costs of regulation; better maximisation of the benefits of regulatory interventions and minimisation of the costs; and greater scrutiny of regulatory proposals.'

 

18. The introduction of regulatory budgets builds on the launch last year of a new template for Impact Assessments and a commitment by the Government to publish the benefit-cost ratio of regulation introduced from 2008. The foundations for regulatory budgets are in place. In taking this natural next step, the Government will be introducing additional transparency in setting out its ambition for regulation and greater control over the costs that will be introduced.

 

19. The ICAEW supports the introduction of regulatory budgets, but believes exempting tax measures and other exemptions (such as climate change) creates a 'credibility gap'. The ICAEW recommends that there is independent, external scrutiny of the regulatory budgets system to provide assurance that the system delivers the intended benefits.

 

Effective Government Guidance on Regulation

 

20. The Anderson Review reported in January 2009 on improving government guidance on regulation in its report The Good Guidance Guide: taking the uncertainty out of regulation.

 

21. Its recommendations to Government sought to improve certainty in government guidance in the following ways:

 

· Increasing certainty over outcome, by providing access for SMEs to a tailored, insured advice helpline and taking responsibility for the quality of its guidance.

· Making guidance more accessible, by expanding the content of Business Open Advice Days and reviewing the brand of its single guidance website.

· Making guidance clearer, by introducing "quick-start" guides and moving to ensure that all guidance complies with the Code of Practice on Guidance.

· Achieving consistent guidance across government.

· Culture change and increasing communication of improvements.

 

22. The ICAEW recommends that the Government accepts the recommendations of the Anderson Review and implements the recommendations as soon as possible.

 

RESPONSE TO INQUIRY QUESTIONS

 

Current Developments

 

What are the implications of the recent economic developments (for example, the economic downturn; credit crunch and problems within the financial sector) for the design and delivery of the regulatory reform agenda, including risk-based regulation?

 

23. The findings of this quarter's ICAEW UK Business Confidence Monitor (BCM) show that businesses are suffering, as the fall-out of the recent crisis in the global financial system spreads. The survey indicates that the outlook for business prospects for the next twelve months is negative. Turnover and profits are all expected to contract, while budgets for capital investments, R&D and staff training, as well as headcount, are forecast to fall. Firms of all sizes suffered a fall in confidence in the first quarter of 2009, with the largest fall recorded among medium sized firms (those with 50 - 249 employees), which experienced a 15.1 point drop in the Confidence Index to -45.2.

 

24. Demand for products and services is dropping and unemployment is increasing as consumers cope with an accumulation of debt. Given this outlook many UK businesses are struggling for survival. The credit crunch has made access to finance increasingly difficult for business (and consumers) and expensive both in terms of the recurring interest costs and the one-off arrangement fees charged by finance providers. Many businesses have cut capital expenditure, reduced their headcount, and are reigning in discretionary marketing and other expenditure.

 

25. The ICAEW believes that the Government should not be imposing a greater regulatory burden on business at this particularly difficult time. More regulation on business will increase costs, at a time when profits are contracting. Increased regulation is a distraction at a time when the attention of the business needs to be totally focussed on survival.

 

26. The ICAEW supports calls from within Government for a moratorium on legislation and legislative announcements, which have not yet been implemented that will entail additional costs for business. As a minimum, the ICAEW believes that there should be a moratorium on all Employment law and Health and Safety changes until the economy is in recovery with an earliest date for new legislation being April 2011.

 

27. Clearly the UK Government, along with those in other EU Member States and other developed and developing nations, needs to address the systemic failures which created the credit crunch and its aftermath.

 

How does the Government balance the need for an effective regulatory framework - providing the necessary benefits and protections - with the commitment to improve the conditions for business success?

 

28. The ICAEW believes that much of the framework for effective regulatory conditions is already in place, in particular, the move towards a risk-based approach, the co-ordination by the BRE and the new Impact Assessment process. However these need to be supplemented in a number of ways.

 

29. The BRE needs to have greater powers and influence. It is significant that the Dutch approach to regulation on which the 'Less is More' report was based includes an independent external watchdog - the Dutch Advisory Board on Administrative Burdens (ACTAL). ACTAL's role is to safeguard the adequate assessment of the administrative burden for businesses (including the burden of subsidies) and the administrative burden for citizens. Besides this assessing role, ACTAL provides strategic advice to the Dutch cabinet concerning red tape, in particular administrative burden and compliance costs. ACTAL draws its strength and influence, in part, because it signs off proposals before they get into the legislative programme. The ICAEW believes the BRE should have the same role over UK legislation, particularly over Impact Assessments. To give the BRE greater authority to challenge departments the ICAEW believes that the BRE should be moved either to HM Treasury or back to the Cabinet Office.

 

30. The Impact Assessment system, introduced in April 2008, has improved measurement, but the quality of assessment is still very variable. It would benefit further with greater external input into the assessment of the costs and benefits of proposals. The KPMG report on the Administrative Burdens - HMRC Measurement Project in March 2006 is a good example of the value of bringing in outside experts to assist with this assessment. The National Audit Office (NAO) has built up a body of expertise in evaluating departmental simplification plans, and an alternative to increasing the powers of the BRE might be for the NAO to be given the role of preparing the assessment of costs and benefits in each Impact Assessment.

 

31. The annual NAO report on the Administrative Burdens Reduction Programme (also see 8) included the following comments on claimed reductions in the administrative burdens:

 

'The reductions claimed were not calculated on a consistent basis and were subject to only limited independent validation. Departments used different approaches to estimating the value of savings, including variations in: the detail of calculations and the extent to which businesses were asked to verify them; the treatment of common issues, such as the expected take-up of revised requirements; and procedures to monitor and challenge claimed savings.'

 

32. An example highlighted in the ICAEW's Budget 2009 submission is the temporary reduction in VAT from 17.5% to 15%. At the time of the 2008 PBR HM Treasury published an impact assessment that estimates total costs for the temporary reduction of £300m, based on businesses' time using standard cost model data. The ICAEW remain concerned that the burdens on businesses, especially small businesses and retail businesses have been significantly underestimated.

 

33. Lastly, the ICAEW believes that the introduction of regulatory budgets would help departments to focus on priorities, (as intended in the Less is More report to the Prime Minister, see 2), although the ICAEW recommends independent, external scrutiny of any regulatory budget system. Sir William Sargent, the current Executive Chair of the Better Regulation Executive has stated that the Better Regulation Agenda requires a culture change in the civil service. We believe that the proposal to have a total budget approved by the Cabinet which covers all regulation, including policy costs, has great merit. Whilst the focus on administrative burdens is necessary, in isolation it will not fully achieve its objectives. Consideration of policy options and costs will significantly increase the likelihood of successful reduction in administrative burdens.

 

How might a proportionate and targeted response to improving the regulatory framework in the wake of the financial crisis be made? What lessons are there for the wide regulatory reform agenda?

 

34. The ICAEW's representation to the G20 will highlight the need for a proportionate and targeted response to improving the regulatory framework in the wake of the financial crisis, which must be internationally co-ordinated in its response.

 

35. The ICAEW believes that it is critical that the G20 continues, in partnership, to lead the way in responding to the crisis, taking all necessary steps to tackle problems whilst refraining from taking competing national or regional measures which could undermine the long-term benefits of globalisation.

 

36. Auditing was developed to provide greater confidence in reported financial information. However, auditors have very limited responsibilities to provide information to banking regulators and supervisors. Audit could now help play a role in strengthening confidence in financial services.

 

37. The financial crisis has made clear the need for reform of capital adequacy requirements. The ICAEW believes that reforms to the capital requirements framework should incorporate a greater sensitivity to risk and be able to address market-wide stress scenarios as well as those at firm-level. Consideration should be given to adding a systemic risk layer to the capital requirements, increasing capital requirements for institutions most exposed to systemic risk or financial contagion. This may require new regulatory monitoring tools to be developed, working with central banks given their responsibilities in respect of financial stability.

 

38. The financial crisis has equally highlighted weaknesses in the regulation of liquidity. The Basel II framework focuses on prudential capital requirements: it does not deal with liquidity management adequately. The ICAEW believes that action to better deal with liquidity risk will be as important as reform to the capital adequacy framework.

 

39. Liquidity risk has had insufficient attention from regulators in recent years. Regulatory regimes need to be updated to address the current and potential future liquidity risks in the financial system. As international banks often managing liquidity on a group-wide, international basis, the regulatory tools need to be also international in nature. Previous attempts to strengthen the regulation of liquidity management have failed due to lack of international consensus.

 

40. The relationship between bank auditors and regulators has been generally weakened in recent years. The Basel II framework does not specifically require the involvement of external auditors for supervisory purposes. In many jurisdictions, auditor responsibilities are to audit the financial statements which are addressed to shareholders. Responsibilities to bank supervisors may be limited to whistle-blowing requirements.

 

41. The audit profession can contribute to greater confidence in banks by providing objective, expert opinions on the information reported by banks, so that those relying on that information can be confident that it has been properly prepared. There are various examples of financial information not currently subject to audit, including bank capital ratios published alongside the accounts, Basel II Pillar 3 disclosures as well as certain bank regulatory returns.

 

42. In response to the ICAEW's oral evidence session in front of the Treasury Select Committee on 28 January 2009 the Institute submitted additional written evidence to the Committee on how the role of auditors might be extended to enhance confidence in bank reporting.

 

43. In the UK, the Financial Services Authority can request reports from skilled persons (such as auditors) on regulated firms (including banks). This is a flexible regulatory tool which can be used in a number of areas such as financial information, fraud, internal controls or compliance with particular regulations.

 

44. More general reports looking at bank controls were used under the previous regime under the Bank of England. The Bank used to routinely request auditors to conduct specific work, often planned to happen at the same time as year end audits. Auditors reported directly to the Bank on these reports. Although the nature of the work might vary from year to year, the fact that there was often consistency across banks as well as the fact that it could be built into the year end audit planning process for all bank audits, allowed greater efficiency. The existing powers under the FSA 'skilled persons' regime could be used in a similar way to the previous Bank of England regime to obtain intelligence, for example, on systemic risk.

 

How could the Government improve its capability to regulate in a proportionate and effective manner?

 

See response to: How does the Government balance the need for an effective regulatory framework

 

Whether there is a coherent package of regulatory measures for improving the conditions for business success; and how regulatory reform initiatives fit into wider Government support.

 

45. The ICAEW's response to the BRE's consultation on 'Regulatory Budgets' in November 2008 advocates that policy costs should be included in the consideration of the cost of implementing new legislation/regulation.

 

46. The ICAEW believes that all regulations which impose a cost (policy cost or administrative burden) must be included in the budgets. This makes the inclusion of EU legislation essential.

 

47. In setting the regulatory budgets the Government's primary consideration should be the additional costs to business in the context of the economic growth over the budget period. Budgets should incentivise departments to constantly search for cost reductions in order to pay for new regulatory costs.

 

48. The ICAEW believes that the budget period should be three years. This facilitates alignment with the Comprehensive Spending Review periods. It also gives departments a shorter focus for complying with budgetary targets. Departments should publish annual reports on the cumulative costs incurred with forecasts for the remainder of the three year period.

 

49. The ICAEW supports the introduction of regulatory budgets, but believes exempting tax measures and other exemptions (such as climate change) creates a 'credibility gap'. The ICAEW recommends that there is independent, external scrutiny of the regulatory budgets system to provide assurance that the system delivers the intended benefits.

 

 

 

 

 

 

 

Design of the new regulations

 

Does Government understand businesses sufficiently to design effective regulations? Is sufficient emphasis evidence given to small businesses and enforcement issues?

 

50. ICAEW written evidence recommends that the BRE be given authority to sign off all regulations (particularly Impact Assessments) or alternatively for NAO to be given the role of preparing the assessment of costs and benefits in each Impact Assessment (see 29 & 30). If the role remains with the BRE it should be moved to HM Treasury or back to the Cabinet office to enhance its ability to challenge departments. A central, professional, expert quasi independent team (like the Parliamentary Counsel who draft all legislation) would avoid the problems of lack of consistency and departments using different approaches to estimating the value of savings outlined in the 2008 NAO report on the Administrative Burdens Reduction Programme.

 

51. The ICAEW welcomes the BRE's and DBERR's leadership in the context of the European better regulation agenda, but would encourage greater partnership and sharing of experience between better regulation authorities in EU Member States and with the European Commission itself. Whilst, the EWP has committed to take the better regulation message to Europe and to ensure coordination between UK and EU simplification measures, we believe that effective coordination in this regard will require careful thought and considerable resource and innovation.

 

52. The ICAEW believes that the Government should continue to maintain its strong commitment to engaging in the EU simplification process. As noted above, the EU is committed to reducing regulatory burdens on business by 25% by 2012. Over the last four years, the European Commission has taken important steps to implement the better regulation agenda. Work continues to simplify legislation that is already on the books to ensure that it is up to date and more accessible. The Commission has already presented a number of legislative measures that will bring about significant reductions in administrative burdens for business, with more legislative initiatives expected. Impact Assessment Guidelines have been reviewed and modernised.

 

53. The European Commission is also finishing the process of identifying and measuring possible burdens and is expected to present legislative proposals later this year. The study looks at how Member States have implemented directives and the extent to which there has been unnecessary 'gold plating', the process where Member States add further requirements other than those stipulated by EU legislation when transporting it into their own legislation. Preliminary results screened 42 EU Acts and identified 356 associate EU information provisions. The transposition of implementation of these EU obligations has resulted in the adoption of more than 9,500 national obligations across Member States. More than 700 of these went beyond the required EU law.

 

54. Analysis varies as to the exact proportion of the total regulatory burden on business accounted for by EU directives introduced into UK law. However, the British Chambers of Commerce 2007 Burdens Barometer, which compiles and totals UK Government Impact Assessment cost figures, indicates that 71.1% of the £66bn UK regulatory burden is accounted for by EU sourced legislation and regulations. 'Gold plating' exists as an additional burden on the UK business environment, on top of the necessary enactment of directives. The ICAEW cautions against 'gold plating' and would argue that the implementation of EU directives should not be seen as an opportunity for UK departments to introduce policy without engaging in the proper policy development process, including full economic analysis at the correct stages.  We would recommend that a system of greater transparency and scrutiny be considered to highlight gold-plating where it exists. 

 

Is there sufficient consideration of how regulations will be implemented, including an appropriate focus on compliance and enforcement issues?

 

55. Initiatives introduced by the Government, as a result of the Hampton Review include reducing the number of regulators, streamlining the regulatory process and improving communication to businesses. The Review recommended that many of the existing regulators merge, to reduce the total number to just seven. This work is being carried out at the moment. The relevant Government departments are planning and overseeing the mergers. To enable streamlining of the regulatory process the Regulatory Enforcement and Sanctions (RES) Act 2008 has been introduced to help regulators focus time and resources on non-compliant businesses, while reducing the amount of administration for those that do comply. The RES Act 2008 gives statutory powers to the Local Better Regulation Office, while the Retail Enforcement Pilot is testing a new methodology for joined-up working between regulators within local authorities. In addition the BRE is producing a clear summary of new or updated regulations, to help businesses quickly understand what regulations affect them, and what they should do to comply.

 

56. The ICAEW believes that it is too early to tell whether these initiatives will result in an improved focus on compliance and enforcement issues. The ICAEW believes that the BRE has improved communication to businesses on new regulations. Implementation of the Anderson Review will help businesses to gain confidence in the guidance issued by government and the national and local regulators.