Appendix A
The Hampton Report
In 2004, the then Chancellor of the Exchequer asked
Philip Hampton, a leading businessman, to lead a review of regulatory
inspection and enforcement. The review's recommendations, known
as the Hampton Report[9],
published in March 2005, set out an ambitious programme to reduce
the burdens on business created by regulatory systems. The report
urged regulators to become more risk-based in their inspection
and information requirements, focus greater effort on improving
advice and guidance to help businesses which want to comply and
to deal more effectively with persistent offenders.
The Hampton Report set out a series of principles
which it recommended all regulators adopt, which are shown in
the table below.
Key conclusions and principles from the 2005 Hampton
Report
| Weakness | Principles of inspection and enforcement
|
| |
| The use of risk assessments is patchy. |
Regulators, and the regulatory system as a whole, should use comprehensive risk assessment to concentrate resources on the areas that need them most.
|
| |
| No inspection should take place without a reason.
|
|
|
| Regulators do not give enough emphasis to providing advice in order to secure compliance.
| Regulators should provide authoritative, accessible advice easily and cheaply.
|
| |
| All regulations should be written so that they are easily understood, easily implemented, and easily enforced, and all interested parties should be consulted when they are being drafted.
|
| |
| There are too many, often overlapping forms and data requirements with no scheme to reduce their number.
| Businesses should not have to give unnecessary information, nor give the same piece of information twice.
|
| |
| Regulators lack effective tools to punish persistent offenders and reward compliant behaviour by business.
| The few businesses that persistently break regulations should be identified quickly, and face proportionate and meaningful sanctions.
|
| |
| Regulators should recognise that a key element of their activity will be to allow, or even encourage, economic progress and only to intervene when there is a clear case for protection.
|
| |
| Regulators should be accountable for the efficiency and effectiveness of their activities, while remaining independent in the decisions they take.
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| |
| The structure of regulators, particularly at local level is complex, prevents joining up, and discourages business-responsive behaviour.
| Regulators should be of the right size and scope, and no new regulator should be created where an existing one can do the work.
|
| |
| There are too many interfaces between businesses and regulators.
| When new policies are being developed, explicit consideration should be given to how they can be enforced using existing systems and data to minimise the administrative burden imposed.
|
The Macrory Report
Following on from the Hampton Report, in September 2005, the then
Chancellor of the Duchy of Lancaster asked Richard Macrory, a
barrister and professor of environmental law, to examine the system
of regulatory sanctions on businesses. Professor Macrory's report[10],
published in November 2006, made a number of recommendations in
relation to regulatory non-compliance, including that regulators
should have regard to certain principles for setting penalties
and characteristics of a successful sanctioning regime:
Six Penalties Principles
A sanction should:
Aim to change the behaviour of the offender;
Aim to eliminate any financial gain or benefit from
non-compliance;
Be responsive and consider what is appropriate for
the particular offender and regulatory issue, which can include
punishment and the public stigma that should be associated with
a criminal conviction;
Be proportionate to the nature of the offence and
the harm caused;
Aim to restore the harm caused by regulatory non-compliance,
where appropriate; and
Aim to deter future non-compliance.
Seven characteristics of a successful sanctioning
regime
Regulators should:
Publish an enforcement policy;
Measure outcomes not just outputs;
Justify their choice of enforcement actions year
on year to stakeholders, Ministers and Parliament;
Follow-up enforcement actions where appropriate;
Enforce in a transparent manner;
Be transparent in the way in which they apply and
determine administrative penalties; and
Avoid perverse incentives that might influence the
choice of sanctioning response.
9 The full Hampton Report can be accessed at http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/budget/budget_05/other_documents/bud_bud05_hampton.cfm
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10
The full Macrory Report can be accessed at http://webarchive.nationalarchives.gov.uk/+/http://www.bis.gov.uk/policies/better-regulation/reviewing-regulation/improving-compliance-among-businesses
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