Select Committee on Merits of Statutory Instruments Forty-Ninth Report



1.  The Government is grateful for the report from the Merits of Statutory Instruments Committee on the management of secondary legislation, as part of its work in looking at the merits of instruments. The report largely concerns matters of process, which are of course of interest also to the Joint Committee on Statutory Instruments. This memorandum is in response to the recommendations and conclusions made in the Committee's Report.

2.  The Government fully accepts the thread of the introductory paragraph in the Report, which notes that delegated legislation, though often un-newsworthy, is nonetheless highly significant in the effects it has on the citizen and on businesses. It is important therefore that such legislation is properly thought through and is of high quality.

3.  Government has, over recent years, sought to ensure that the quality of secondary legislation is maintained and that, where appropriate, opportunities are taken to improve the process. Explanatory Memoranda for affirmative instruments were introduced in 2001, and extended to negative instruments in 2004. Common Commencement Dates for most instruments which affect businesses were introduced from 2005, in a move generally welcomed by stakeholder groups, and are being extended progressively through departments. The Government publication Statutory Instrument Practice is kept under constant review and is re-issued from time to time. An updated edition will have been issued prior to the delivery of this response.

4.  Prime responsibility for the management of the quality and of the process of each department's secondary legislation must of course rest with the department. The circumstances of individual departments in the context of secondary legislation will not all be the same and the way they are structured to handle the process needs to accommodate these differences. The role of the centre will not therefore be comparable to its role in the management of the programme for primary legislation. Against this background, there will nonetheless always be scope for improvement in the way individual departments manage the process and the Committee's report will be helpful in promoting such improvement. These points are developed further in the comments on individual recommendations which follow.


Recommendation 1: In each department there should be one member of top management (i.e. at Board level) who is accountable to the relevant Minister for the efficiency and effectiveness of the process of preparing SIs as well as for ensuring that the finished products meet the requirements of good regulation (Paragraphs 51-52)

5.  Individual Departments need to be able to decide on their management structure and Board membership. Departments have in place chains of responsibility and accountability for work which is undertaken by the Department. The secondary legislation process brings together several strands of a Department's work, each with its own management and accountability structure.

6.  It is already the case that, as part of the better regulation agenda, each Department has a better regulation champion who works with the Department's Better Regulation Minister.

7.  It could be possible to build on this approach by ensuring that there is also a senior manager in each Department responsible for monitoring the efficiency and effectiveness of the process of preparing SIs. Individual Government Departments will examine this recommendation further to see how it can be most appropriately applied in each case, but for some Departments it is clear that it could prove difficult . Given the many elements of the SI process it would not necessarily be possible for Departments to have a single accountable person along the precise lines suggested by the Committee.

Recommendation 2: Departments should prepare annual management plans for their SIs, including milestones to be met and machinery for reviewing their achievement; and should produce and publish annual statements of their projected secondary legislation, listing the SIs they plan to submit for parliamentary approval, briefly describing each one and stating when it is planned to come into effect (Paragraphs 53-58)

Recommendation 6: Departmental lists of planned secondary legislation should be consolidated into a single list. A central mechanism should be established for exploring with departments the scope for adjusting the scheduling of SI programmes if it should appear from the consolidated list that such action is necessary in order to avoid congestion at the point of parliamentary scrutiny (Paragraphs 75-79)

8.  The Government acknowledges the important role of good planning and the use of project management techniques in the SI process. The Government also acknowledges the importance of keeping stakeholders informed of forthcoming secondary legislation which will impact on them.

9.  In the December 2004 Pre-Budget Report, the Chancellor of the Exchequer announced that the common commencement date (CCD) initiative would be extended progressively to all domestic regulations with a bearing on business. Under the CCD initiative Departments are required to prepare an annual statement, which is issued in January, listing regulations affecting business which they expect to commence on the following 6 April and 1 October. CCDs and the accompanying annual statements help business plan for new regulation; increase awareness of new or amended regulations; and give Ministers a strategic overview of Departments' regulation programmes.

10.  Alongside this many Departments, whose secondary legislation is not formally subject to CCDs, have in place alternative commencement dates for some of their SIs, which have been agreed in conjunction with their stakeholders.

11.  Departments' timetables for projected legislation can be subject to amendment and revision in response to a wide range of policy developments, and to outside events. Any management plans would be subject to substantial and frequent revision. As a result they are likely to be of limited benefit to either Parliament or stakeholders. To attempt to produce such plans could accordingly impose a disproportionate additional burden on Departments.

12.  Given this, and the information already published under the CCD initiative, the Government does not think that Departments can produce effective detailed management plans for all projected secondary legislation, with such plans being centrally consolidated. But the scope for plans of this nature will be kept under review by Departments.

13.  The Government acknowledges the Committee's concerns regarding congestion at the Parliamentary scrutiny stage. Every effort is made to give sufficient notice of debates on SIs to enable the Committee to report before the debates take place. A good working relationship has been established between the Government Whips Office in the House of Lords and the Committee, which has enabled both sides to show flexibility in the past year.

14.  The Government acknowledges that there is scope for improved management of the SI process in some Departments. The Committee's Inquiry has been helpful in bringing this to the attention of Departments. However, even with improved management of the departmental SI process, the Government does not believe it will be possible to eliminate completely congestion or bunching. Departments make every effort to introduce their secondary legislation within the Parliamentary calendar so as to allow for proper Parliamentary scrutiny and approval. This approach is emphasised in the new edition of Statutory Instrument Practice.

Recommendation 3: Departments should plan their scheduling of SIs with common commencement dates in such a way as to avoid the risk of congestion at the stage of parliamentary scrutiny (Paragraphs 59-66)

15.  The guidance on CCDs, issued by the Small Business Service in the Department of Trade and Industry, gives Departments clear guidance on dealing with SIs subject to CCDs. It advises Departments that they must allow time for proper parliamentary scrutiny. To achieve this it advises Departments to avoid laying just ahead of the 21 day minimum period before commencement; to avoid laying negative instruments in the summer recess; to allow sufficient time for instruments subject to affirmative resolution to be considered and reported upon by select committees before any motion to approve can be moved.

16.  The guidance also emphasises that good project management and planning skills are key elements of the CCD process and that all key stakeholders, policy divisions, legal teams and parliamentary clerks should be involved in this process.

17.  The Government believes that Departments should follow the best practice advice and guidance on CCDs to ensure effective scrutiny of the affected SIs by Parliament.

Recommendation 4: The Government should take action to ensure that no instrument is laid before Parliament less than 21 days before it is due to come into force unless there are clear and compelling reasons of operational urgency for such action which are explained at the time of submission (Paragraphs 67-70)

18.  The updated Statutory Instrument Practice will remind Departments that the 21-day period for laying is a minimum period and that, whenever possible, instruments should be laid well in advance of this to allow Parliament to consider the impact of the instrument. The examples highlighted by the Committee of failure to comply with this rule of practice include many instances where it was necessary to take urgent action and where, had it not been, the Government would have been criticised for the speed of its response. Such examples included preventive measures for dealing with Avian Influenza, Food Import Emergency Control Regulations, Export Control Orders, the application of United Nations Measures and sanctions against overseas territories; and instruments implementing Budget announcements where prior notice could not be given.

19.  Where departments are unable to comply with the 21-day rule then the reasons for operational urgency will be explained in the Explanatory Memoranda. This will be re-inforced within the new edition of Statutory Instrument Practice.

Recommendation 5: Departments, when planning their SI programmes, should, where possible, avoid scheduling instruments for laying during the peak traffic periods of March, July and December and, to facilitate effective scrutiny by Parliament, the Government should stagger the laying of instruments which must be approved by the ends of these periods (Paragraphs 71-74)

20.  The Government shares the views of the Committee regarding the desirability of minimising the bunching of instruments during the peak traffic periods of March, July and December. Parliamentary scrutiny of instruments is a key part of the process and departments need to allow adequate time within their planning, including contingencies to allow for slippage, to ensure that this occurs. Improvement in the planning processes is a key issue for departments to address.

21.  Even with improved planning it is unlikely that periods of bunching will be avoided completely. There is a need for much legislation to come into force at the start of the financial year or at the start of a calendar year. Although individual departments will, as far as possible, spread their instruments, the tradition of holding the Budget near the end of the financial year will mean that many instruments cannot be laid other than during March. Additionally, part of the July peak will be attributable to departments attempting to bring forward into the period when Parliament is sitting the laying of instruments which would otherwise be laid during the recess.

Recommendation 7: Departments should be given guidance on best practice regarding the planning and management of secondary legislation programmes and should be held to account for their performance in this area (Paragraphs 80-81)

22.  The Government acknowledges that Departments should follow best practice in planning and managing their secondary legislation.

23.  Extensive guidance is currently available to officials on the SI process. The documents listed below cover the wide range of work undertaken by officials in the preparation of a statutory instrument.

Statutory Instrument Practice

Code of Practice on Consultation

Regulatory Impact Assessment Guidance

Transposition Guide: How to implement European Directives effectively

Common Commencement Dates Guidance

24.  All of this guidance will be linked via the new Statutory Instrument Practice section of the OPSI website which is being developed by Her Majesty's Stationery Office (HMSO).

25.  In addition to this, Departmental Lawyers can access guidance materials and advice on drafting secondary legislation through the Government Legal Service's intranet.

26.  The Government does not feel that it is necessary to further add to the available guidance. It is the Government's view that prime responsibility for the management of the quality and of the process of each Department's secondary legislation should rest with the Department. In line with this, each Department is best placed to promote and take forward best practice initiatives in the planning and management of their secondary legislation.

Recommendation 8: The Government should develop more robust mechanisms to ensure that the guidance which is issued on SI planning and good regulation in general is more closely followed (Paragraphs 82-83)

27.  The Government does not believe that it would be practical to have one Minister responsible for co-ordinating secondary legislation across Government. Individual Secretaries of State are responsible and best able to manage their Department's secondary legislation.

28.  The Government makes good use of several, effective tools for ensuring good planning and good regulation from Government departments: the Government insists on high-quality Regulatory Impact Assessments (RIAs) from departments, the Government scrutinises proposals by Ministerial committee, the NAO carries out audits of RIAs and the independent Better Regulation Commission (BRC) makes recommendations to Government on issues of better regulation. Moreover, the Better Regulation Executive (BRE) works closely with departments' Better Regulation Units and Board-level Champions to ensure that guidance is followed.

29.  The most robust mechanism is the need for cross-government Ministerial clearance through the Panel for Regulatory Accountability (PRA), chaired by the Prime Minister or the Minister for Cabinet Office. All regulatory proposals likely to impose a major new burden on business require clearance from the Panel, the two exemptions being emergency legislation and tax matters considered by the Chancellor in the course of normal budgetary processes. The Panel's consideration is based on a thorough RIA which has to have been agreed with the Cabinet Office BRE before the proposal can be put to wider ministerial approval. The PRA considers all such proposals in the context of the department's previous regulatory performance and the burden of regulation across key business sectors.

30.  In terms of compliance with Statutory Instrument Practice, HMSO will from 1 October report to departments on their performance (e.g. in terms of compliance with the 21-day rule) and will continue to monitor the Explanatory Memoranda which departments prepare, drawing to their attention areas which in their view do not comply with the Statutory Instrument Practice guidance. However final responsibility for the standard and quality of Explanatory Memoranda must remain in departments.

31.  The Heads of the Government legal teams take a keen interest in the SI process. Departments also seek to avoid having any instrument reported on adversely by either the Committee or the JCSI. Reports of both Committees are subjected to close scrutiny and any lessons to be learned are promulgated either via SI Practice Circulars or via the secondary legislation section of the Government Legal Service's intranet.

Recommendation 9: The Government should take action, via the BRE, to ensure that the 12-week consultation requirement is met other than in exceptional cases and that, where there are compelling reasons for breaching this rule, a clear explanation is given (Paragraphs 85-86)

32.  The Government agrees with the need to ensure that the consultation requirements are met. The BRE already takes action to achieve this. In addition to working on a day-to-day basis with Departments on all aspects of Better Regulation, including consultation, the BRE reports annually on compliance of these consultations against the Code of Practice on Consultation.

33.  The first criterion of the Code of Practice on Consultation is that departments should consult widely throughout the process, allowing a minimum of 12 weeks for written consultation at least once during the development of the policy. The Code goes on to say that departments should consider the specific circumstances of their stakeholders and consider longer consultation periods at certain times, e.g. during the summer holiday period. The Code also states that where, due to exceptional circumstances, a consultation period lasts less than 12 weeks this must be highlighted in the consultation document, giving the Minister's reasons for this and explaining the extra efforts taken to ensure the consultation is as effective as possible. The BRE challenges departments when any consultation exercise is considered to be below the expected requirement. In 2005, 80% of the Government's consultations lasted at least 12 weeks, representing an increase of four percentage points on 2004.

34.  Each government department has its own Consultation Coordinator who is fully aware of the Code's requirements regarding the minimum length of formal consultations and consultation exercises which go beyond the minimum requirements are encouraged through this network.

Recommendation 10: Consultation should be mandatory for all instruments which seek to transpose EU obligations into UK law, even where this is not required by the European Communities Act 1972 (Paragraph 87)

35.  Departments are already required to consult fully on instruments implementing EU legislation, as stated in the Code of Practice on Consultation.

36.  Moreover, government departments are required to carry out full impact assessments (except for when the legislation imposes no costs or no savings or increases statutory fees by a predetermined formula) when preparing to transpose EU law into national law and the consultation of stakeholders is a significant part of the RIA process.

37.  The Cabinet Office has provided departments with a Transposition Guide to encourage clear thinking about the practicalities of implementing legislation right from the start of the policy-development process in order to ensure that policies are delivered in the most proportionate and effective way. This guidance covers the need to consult on the various implementation options.

Recommendation 11: - The Government should include in its guidance to departments on the consultation process the need, in appropriate cases, to ensure that there is adequate opportunity for ordinary citizens, as well as representative groups, to make their views known and should offer advice to departments on the various means by which such grass-roots consultation might be achieved (Paragraphs 91-93)

38.  The Government is fully committed to ensuring that consultation exercises are accessible to all relevant stakeholders, whether citizens, businesses or charities and voluntary groups. The importance of making special efforts to reach certain stakeholders such as small businesses, children, consumers and those from minority groups is emphasised in the Code of Practice on Consultation. Suggestions in the Code of how to reach such groups include public surveys, focus groups, regional events, targeted leaflet campaigns and stakeholder meetings.

Recommendation 12: The Government should put more impetus behind the process of consolidation and should aim, as a general rule, to publish consolidated electronic versions of each instrument following amendment (Paragraphs 94-99)

39.  There is a distinction to be drawn between formal consolidation—that is making new legislation—and the publication 'informally' (that is without making a new instrument) of an unofficial text of an instrument taking account of textual amendments that have been made to it in subsequent instruments. The key consideration as to whether an instrument should be consolidated - whether formally or informally - is the convenience and ease of comprehension for users. Consolidation can also make a major contribution to better regulation.

40.  The Government agrees that consideration should be given to formal legislative consolidation, both in cases where there are large numbers of instruments and amending instruments, and cases where minor changes are made in the principal instrument. The Government will therefore continue to dedicate resources to the task of formally consolidating instruments where departmental Ministers can identify appropriate cases.

41.  In the past departments have sought to maintain a balance between amending and consolidating instruments because of concerns about the costs to the end-user who would be required to purchase copies of larger documents on a regular basis. With the increasing use of the internet, most users of statutory instruments access legislation via the HMSO website. The former concern about cost is thus much less significant now and this can be taken into account in considering consolidations.

42.  However the task of consolidation can be a complex and resource intensive operation, involving not only the mechanical task of applying amendments but also involves a review of the policy objectives, a complete review of the drafting—including ensuring the drafting language is up to date and the overall structure of the instrument remains appropriate—and ensuring that cross-references to other legislation remain correct.

43.  The work on consolidating the Veterinary Medicines Regulations by DEFRA, which resulted in the revocation of 45 instruments and disapplied another 22 and resulted in everything that needs to be known about the subject being contained in a single set of regulations, is an excellent example of consolidation. Similarly, in the case of the Criminal Procedure Rules, the DCA consolidated 45 SIs into one instrument in 2005. The work currently being undertaken by the Insolvency Service and DTI to consolidate the various Insolvency Rules, Orders and Regulations, will similarly reduce the number of instruments which cover this subject.

44.  As regards informal consolidation, there are some examples of "informal" consolidations being prepared by Departments or their agencies. For example DWP publishes on the internet and makes available for sale a very comprehensive textual restatement of all social security and pensions legislation, primary and secondary, known as "the Blue Books". Similarly the Environment Agency publishes its "NetRegs" on the internet. Departments have to be careful in publishing informal consolidations, to prevent any possibility of accidental errors occurring on which users might rely and to avoid generating any confusion as to what is the authoritative text, but we are not aware that significant problems of this kind have arisen hitherto. Departments will therefore continue to identify opportunities for informal consolidations, assisted by new technology, where it is feasible to do so and where the additional resources required are manageable.

45.  The recommendation is consistent in its intention with the Government's Simplification Programme. As the report of the Committee notes, all departments are producing simplification plans which explain how they will reduce the regulatory burdens which fall on business, the voluntary sector and front-line public servants. As part of the exercise, departments are considering whether they can reduce that burden by providing greater clarity on the content or interpretation of legislation. In some cases, a change to the presentation of regulations (such as consolidation) or a change to other supporting material (such as shortening or redrafting guidance), may reduce the time it takes for a business to understand and implement a statutory requirement. Where that is the case (i.e. where there is a practical benefit from doing so) departments should already include such measures in their simplification plans.

Recommendation 13: Once a public database of statute law is available, it should be extended as quickly as possible to cover secondary as well as primary legislation (Paragraph 100)

46.  The Government accepts the value of making available a fully revised and updated version of all secondary legislation via the Official Legislation website. This could best be provided by extension of the existing Statute Law Database project being taken forward by the Department for Constitutional Affairs. The immediate priority is to ensure that a fully revised and up to date version of the official statute book is delivered for use by the public and that work on this is maintained. After this has been achieved consideration will then be given as to how work can be extended to updating secondary legislation.

Recommendation 14: To the extent that it is not already departmental practice, SIs as a whole, and their Explanatory Memoranda (EMs) in particular, should be subjected to review in the course of preparation by a senior official who is sufficiently detached from the subject in question to be able to assess its intelligibility to the layman reader (Paragraphs 101-102)

47.  The Government accepts that it is good practice for Departments to assess whether the SIs and Explanatory Memoranda which they produce are intelligible to the layman reader. The method suggested by the Committee is one way in which this can be done and will be drawn to Departments' attention.

Recommendation 15: Departments preparing SIs which implement EU obligations should give particular attention to including in their EMs a clear statement of the obligations which the instrument in question imposes, of the penalties for non-compliance and of the guidance which is available to those who will be affected by its enactment (Paragraph 103);

48.  SIs implementing EU obligations which will increase costs have to be accompanied by a Regulatory Impact Assessment (RIA) when submitted to Parliament and the RIA must detail the communication strategy for informing those affected by the changes the SI will bring about. The RIA, according to the Cabinet Office guidance, should also set out clearly all issues relating to compliance, enforcement and sanctions.

49.  Cabinet Office guidance on writing RIAs states that RIAs should be carried out when negotiating any EU legislation or agreement that will have to be implemented in the UK: this includes European directives, regulations, decisions, technical adaptations to EU provisions, and joint positions and conventions under second and third pillar cooperation.

50.  The EM should also set out what guidance the department is providing to users and stakeholders.

Recommendation 16: The guidance to departments on consultation should reinforce the need for EMs to report the outcome of consultation and to explain why legislation rather than other forms of regulation is the chosen course for achieving the required objective (Paragraphs 104-105);

51.  Revised guidance on preparation of Explanatory Memoranda makes it clear that departments "should set out who was consulted, over what period and with what responses". There should also be "some analysis of the outcome and the Department's policy response to the opinions expressed". Where appropriate departments should also refer to more detailed analysis available on its website.

52.  Further information on the consultation process is also available in the Regulatory Impact Assessment.

53.  The fourth criterion in the Code of Practice on Consultation states that feedback should be given by Government regarding both the responses received over the course of the consultation period and how these responses influenced the policy. Departments should provide a summary of the responses given and an explanation of how the proposal will change in the light of the responses received for each question asked. This information should then be included in the RIA which is attached to the EM accompanying all SIs laid before Parliament. Departments and departments' Consultation Coordinators, and the BRE where appropriate, work together on the development of RIAs including how the results of the consultation exercise have affected the SI.

54.  Under the heading "Rationale for Government Intervention" Cabinet Office guidance says that RIAs should detail alternatives to the proposed legislation to reach the same policy outcome such as non-regulatory approaches. The RIA should state why the draft legislation is deemed the most suitable approach and how the findings of the consultation have impacted on this decision.

Recommendation 17: The guidance which departments are given on the preparation of SIs should emphasise the need for officials to consider, in appropriate cases, how adequate and timely publicity can be given to the implications for members of the public of imminent secondary legislation (Paragraphs 106-107)

55.  As a result of the revised Statutory Instrument Practice and guidance on the preparation of Explanatory Memoranda, Departments will be required to provide details of proposals to disseminate information on secondary legislation and any accompanying publicity plans.

Rec. 18 - The Government should review its guidance on the avoidance of excessive implementation of EU Directives to ensure that it is reaching and being understood by officials who are engaged in the transposition of EU Directives into UK law. More specifically, departments involved in preparing secondary legislation for this purpose should consider carefully whether parallel action is appropriate—for example, making compensating adjustments to existing UK legislation or invoking any exemptions from Directives which may be allowed—to reduce the risk of over-implementation and whether less complex and burdensome procedures, perhaps reflecting what is being done in other Member States, might suffice (Paragraphs 109-111)

56.  It is Government policy not to go beyond the minimum requirements of EU legislation, unless there are exceptional circumstances, justified by a cost-benefit analysis and extensive consultation with stakeholders.

57.  The Cabinet Office's Transposition Guide includes recommendations on taking advantage of derogations which keep requirements to a minimum, streamlining between new and existing domestic regimes, and making comparisons with the approaches to transposition taken by other Member States. Instances of where departments go beyond the minimum requirements - "gold plating" - have to be approved by the Panel for Regulatory Accountability.

58.  The Government recognises that the stock of existing EU-derived legislation may include some legislation which has not been implemented in the least burdensome way possible. The Davidson Review is therefore working with departments to identify and consider ways to simplify any unnecessary burdens created by over-implementation of existing EU-derived legislation. The review is due to report with recommendations to the Government by the end of 2006.

Recommendation 19: The Government should ensure that there is timely consultation with the business community and others likely to be affected at the stage when proposed EU Directives are being examined and that Ministers are fully sighted at that stage of the likely shape and impact of the secondary legislation which will be required to implement such Directives once they have been approved (Paragraphs 112-113)

59.  Consulting with the business community and other stakeholders as early as possible is recognised good practice, and as such is promoted across Government as a way of assisting Ministers to determine UK positions on EU proposals. The Transposition Guide states that before a proposal is published, departments should carry out appropriate informal consultation with other government departments and with external stakeholders. The Guide holds up the DTI's VIPER Group (Vehicle Industry Policy and European Regulation Group) as an example of best practice - this stakeholder group, convened by the DTI, is made up of representatives of the automotive industry and meets regularly to discuss emerging EU regulatory proposals.

Recommendation 20: Departments, when they draw up their plans for secondary legislation, should include against each instrument a target date for post-implementation review and the outcomes of such reviews should be reported when completed (Paragraphs 114-115)

60.  Post-implementation review is an important part of the RIA process. According to the Cabinet Office's RIA Guidance, the RIA should state how and when the review will take place, which elements of the policy will be reviewed, the basis of the review and the criteria for modifying or replacing the policy. The RIA Guidance also says that stakeholders will need to be consulted during the review and that, where possible, a specific person should be named as responsible for conducting the review.

Cabinet Office

10 October 2006

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