Supplementary memorandum
from the Better Regulation Executive
Responses to Supplementary
Questions from the
House of Commons
Regulatory Reform Committee's Inquiry:
Themes and Trends in Regulatory Reform
Paragraph 2.22 of
BRE's Memorandum states:
"In response the Government put
in place an external panel to independently challenge, scrutinise and validate
departments' claimed savings. This
External Validation Panel first sat in October 2008 to scrutinise departments'
claimed savings for December 2008 Simplification Plans. Following their review an estimated £1.7bn of gross simplifications
were approved, with an additional £182m approved subject to follow up actions.
The External Validation Panel members asked government to re-review the
remaining simplifications to ensure they are credible and we have done this for
all simplification measures worth more than £10m; an additional estimated
£220m. The panel will continue to sit annually to carry out its
independent scrutiny function"
The External Validation Panel
(EVP) will sit annually, ahead of the publication of simplification plans,
until the end of the programme in May 2010.
24 measures (value £2 billion)
were specifically examined by the Panel:
o 2 measures (approx £70 million) were withdrawn by Defra;
o 1 measure (approx value £30 million) was deferred until stronger evidence
of take up was available.
o 18 measures were fully validated (value £1.7 billion) including:
- 9
measures validated on initial evidence provided by Departments;
- 9
measures validated after additional notes or an evidence session;
o 3 measures (approx £200 million) were technically approved pending
on Departments carrying out follow-up actions.
The following measure was
questioned and subsequently approved:
Additional evidence provided
by DWP proved savings, which were subsequently approved by the EVP.
The panel asked that the following measure was
deferred until 2009:
HSE - Manual
Handling Operations Regulations proposal - £32.5 million
The panel considered that HSE should not score
these savings until further evaluation had been carried out.
During the additional evidence round, EVP
members were advised that Defra had withdrawn 2 measures from the process:
The Pollution, Prevention and Control Regulations 2000 - £24 million
The Transmissible Spongiform Encephalopathies (TSE) Regulations -
£44 million
The EVP process highlighted
these measures were corrections to the estimates made during the initial burden
measurement exercise and should therefore not be counted towards the Departmental
administrative burden reduction target.
2. What are the BRE's views on the future
role of principles-based regulation? Should it in future always be combined
with specific rules? Are there areas in which the BRE sees principles-based
regulation actually being extended in the face of current thinking? The FSA has
expressed an intention to move toward more outcomes-focused regulation? What is
the BRE view of that and what it actually means in practice?
Principles-based regulation focuses both regulators and the
regulated on delivering against regulatory objectives. This avoids regulation
becoming an exercise in purely 'going through the motions' or
'box-ticking'. It also provides a flexible means for businesses to meet
the regulatory outcomes that are set by legislation. However,
principles-based regulation should be used where it is appropriate and where it
will deliver the best outcomes. Regulatory application needs to be flexible
enough to accommodate those areas where principles-based regulation is not the
ideal. Small businesses, for example, often prefer specific rules which provide
clarity. In all cases, it is critical to ensure that the right risks have
been identified and are reviewed regularly.
Current principles-based regimes combine specific rules and general
principles. The BRE believes that creating this balance is the correct
approach and will continue to help ensure that this is the case. It is
essential that clear guidance is provided, where appropriate, to assist those
regulated in understanding what is required in order to comply with regulation.
The FSA will continue with a mixture of principles-based and
rule-based regulation. However, the FSA informed the Treasury
Select Committee that they had been too focused on examining systems,
processes and structures in those they regulated and are now focusing much
more closely on the risks presented by different business models and
on outcomes for consumers. They also concluded that they had focused
on firm-specific risks and needed to concentrate more on systemic risks,
working closely with the Bank of England. The FSA have said that
'outcomes-focused regulation' provides a better description of their philosophy
toward supervision: i.e. the FSA will judge firms on the outcomes and
consequences of their actions. The BRE
supports outcome-focused approaches to regulation.
3. What is the BRE's
opinion of the suggestion made by the Risk and Regulation Advisory Council in
'Whose Risk is it Anyway?' to establish a FARO (Fast Assessment of Regulatory
Options) Panel to avoid knee-jerk reactions to new regulatory challenges? Would
such a panel have a role in the response to the current economic crisis?
While it
accepted all the other recommendations of the Better Regulation Commission's
'Whose Risk is it Anyway?' report, the Government rejected the recommendation
to establish a Fast Assessment of Regulatory Options (FARO) Panel. In doing so it noted the importance of
bringing real expertise to bear on the policy questions being addressed.
In responding to
the issues thrown up by the crisis in financial services, the Government asked
Lord Turner to lead a review of the issues, so ensuring a considered and
evidence-based response which avoided knee-jerk reactions.
The Government's
view remains unchanged that the probable lack of expertise that is relevant to
any specific policy issue among the membership of a generic Panel like a FARO
would be a fundamental weakness.
4. What is the BRE's
view on why the idea of a Consumer and Trading Standards Agency proposed by Hampton was not
implemented and of the advantages and disadvantages of such a body over and
above the Local Better Regulation Office?
Philip Hampton's 2005 report highlighted that the approach to Local Authority
regulation permitted wide variations and inconsistencies and that the system as
a whole was uncoordinated. He suggested
that improved consistency at Local Authority level requires better coordination
of Departments and Local Authorities at national level. The review proposed the
creation of a new Consumer and Trading Standards Agency (CTSA), to bring
greater coordination to the work of Local Authority trading standards
departments.
The proposed remit of the CTSA was consumer protection and trading
standards. It would have been responsible for coordinating all trading
standards work and for improving the consistency of regulation experienced by
businesses that trade in several Local Authorities. Hampton
said this could include the establishment of a central operation to lead on the
regulation of large multi-site businesses.
The decision to establish the Local Better Regulation Office (LBRO) has
achieved the original intention behind Hampton's
recommendations but will ensure further reaching benefits than the proposed
CTSA. The remit of LBRO is wider than that
originally envisaged for CTSA. LBRO's
remit covers environmental health, licensing and fire safety, in addition to
trading standards. A wider remit was required in order to achieve greater
co-ordination and consistency across the regulatory system, and hence improve
the performance of Local Authority regulatory services and outcomes for
businesses, consumers, workers and the environment. LBRO has the remit to work across
organisational boundaries that exist at local and national level.
The intention was specifically to communicate a
coherent summary of changes in regulation that come into effect twice a year on
Common Commencement Dates to one million businesses. A one page summary of new
regulations is provided to businesses, which is supported by more detailed
information on specific regulations.
The BRE continues the work for each successive
Common Commencement Date. A variety of channels are used, which include direct
e-mail but is principally through working with business organisations
representing more than 600,000 members and Professional bodies, including
accountants, with 250,000 members, who subsequently use their own contacts with
businesses. Our information also appears on a variety of business news websites
aimed at small businesses. Common Commencement Date summaries are published on
the BusinessLink website (http://www.businesslink.gov.uk/ccds).
6. Recommendation 8 of the
Committee's 'Getting Results' report said that the BRE should take steps to
advertise its existence at all levels, including trade association level, to
improve awareness of the BRE and the regulatory reform agenda. What specific
such steps have been taken?
Recommendation 8: We recommend that
the BRE strengthen its channels for obtaining grass roots information from the
level of individual businesses and individual local authorities, as well as
individual organisations in the third sector. The BRE should use its contact
with the new Local Better Regulation Office as one means of achieving that
objective. The BRE should take steps to advertise its existence at all levels,
including trade associations.
The BRE has continued to
strengthen its existing relationships with key trade associations and business
organisations.
Building on this, in March 2009
the BRE initiated contact with 76 trade associations and business organisations
with whom we have had little, if any, previous contact to raise awareness of
who we are and what we can offer to their audiences. We are following this up individually.
Since December 2008, the BRE
has taken forward a series of week-long regional visits to reach a wide range
of business organisations and businesses.
The programme has so far
achieved:
· 5 regional visits - with a further 5 planned
· 21 business visits & 24
open/networking events
· Media coverage: 30 articles, reaching in
excess of 750,000 people
The BRE maintains a close
working relationship with the LBRO and is discussing ways to maximise reaching
their audiences.
We are continuing to develop
the range of direct and indirect ways in which we reach out to business groups
and businesses.
7.
Recommendation 9 of the 'Getting Results' report recommended more active BRE
involvement in facilitating sharing of best practice among regulators and
Government Departments. In addition to the measures described in general terms
in the Government Response to the report, what steps have been taken
specifically by the BRE in relation to that recommendation?
Recommendation
9: We
recommend that the BRE become more actively involved in facilitating greater
sharing of best practice among regulators and Government Departments. The new
Local Better Regulation Office should be involved in articulating the local
authority perspective in that exchange.
The main focus of the
BRE "good practice" activity is built on the Hampton Implementation Reviews.
These are independent peer reviews which promote cross-fertilisation and foster
good practice networks between regulators.
The BRE interacts
with regulators in support of good practice issues at a number of levels: in
regular network meetings, and in putting regulators in touch with each other
regarding specific issues where good practice could be shared.
In March 2008 5
Hampton Implementation Reviews of major regulators were published - The Health
and Safety Executive, the Food Standards Agency, the Financial Services
Authority, the Environment Agency and the Office of Fair Trading.
A further 31
reviews are being conducted between Oct 2008 - Dec 2009. Currently 3 of these
reviews have been published - Gambling Commission, Medicines and Healthcare
products Regulatory Agency (MHRA) and Animal Health.
The Local Better Regulation Office (LBRO) will work to secure the
effective performance of local authority regulatory services. This will ensure
businesses receive greater consistency in advice, support and inspection from
local authorities, particularly those that operate across council boundaries.
The BRE continue
to build relationships and share best practice across Government through our
internal stakeholder networks which include Departmental Board Level Champions
(BLCs) and Better Regulation Units (BRUs).
Paragraph 2.3.7
states:
To ensure that these priorities are embedded, the new performance
framework for local authorities and local authority partnerships, published by
CLG in October 2007, includes indicators on all of the National Enforcement
Priorities of Central Government, as well, as a dedicated indicator to measure
business satisfaction with local regulatory services (NI 182). This indicator
will measure whether businesses feel that they have been treated fairly by
regulatory services, and whether they feel that the contact that they had was
helpful. The results will allow local government to demonstrate that they are
contributing towards a business friendly environment, at the same time as
achieving excellent regulatory outcomes.
National indicator
182 is one of the 198 national indicators against which Local Authorities will
be assessed. All Local Authorities
report on all 198 indicators, but 35 are picked by each Local Authority to make
up their Local Area Agreement (LAA). 3 Local
Authorities have adopted 182 as part of their LAA. LAA's run between 2008-11
and targets are set that the Local Authorities must reach to entitle them to a
reward grant from central Government. The BRE is responsible for national
indicator 182. BERR has a total of five
of the national indicators.
2008/09 is the
first year of these indicators, so no data is yet available. Local Authorities will be submitting their
data at the end of June 2009, after which performance information will be
available.
LBRO has made firm
progress in establishing itself as an organisation whose role is to reduce
unnecessary burdens on business, but doing so in a manner that is consistent
with Government commitments to the new performance framework for local Government,
a framework that seeks to reduce unnecessary burdens on local authorities
themselves and allow local Government to lead its own improvement.
One of the key
projects that LBRO has developed is the Trading Places project. This is a new
initiative to show Local Authority regulators first-hand how their decisions
affect the businesses they inspect. By
the end of 2009, hundreds of council trading standards, environmental health,
licensing and fire safety officers across the UK will have spent two days in
branches of major retailers and other companies - finding out the lengths
companies must go to in complying with the law.
Officers will
spend time talking to company managers about compliance policy - and will also
spend a day on each shop floor, finding out how compliance issues affect
day-to-day working in stores and factories.
