Lord Prior of Brampton
Parliamentary Under-Secretary of State
Department for Business, Energy & Industrial
Strategy
1 Victoria Street
London
SW1H 0ET
Meg Hillier MP
Chair of the Committee of Public Accounts
House of Commons
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+44 (0) 20 7215 5000
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[email protected]
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www.gov.uk
1 March 2017
Dear Meg,
THE GOVERNMENT’S RESPONSE TO THE COMMITTEE’S REPORT ON BETTER
REGULATION
In the Government’s response to the Committee’s report on Better Regulation, there was a
commitment to provide more information on two of the recommendations by February 2017.
The attached paper sets out further information on the Government’s understanding of the
impact on businesses of existing Regulations, and an interim update on progress with our
efficiency review.
The paper sets out what has already been done by BRE and Departments to understand the
impact and scale of existing regulations on business. Deregulatory budgets and Cutting Red
Tape Reviews provide, and will continue to provide strong incentives for Departments to look
at existing regulations to find business savings. The targeted Cutting Red Tape reviews aim to
address the issues that concern business the most.
I understand that Alex Chisholm has already written explaining that Ministers across
Government are currently considering the best way to change the system to make the Better
Regulation Framework more proportionate. The attached provides an update on progress with
making improvements to the system. However, there will be further improvements to follow
and we will provide a further update to the Committee in the July 2017 Treasury Minute
Progress Report.
DAVID PRIOR
Update to the Public Accounts Committee on Better Regulation
Introduction
1. In its response (Cm 93891) to the 18th report of the Public Accounts Committee for 201617, the Government undertook to set out how it intends to improve its understanding of the
scale of existing regulations, and also to publish details of the changes that are to be
made to increase further the proportionality of the better regulation system by February
2017. This statement seeks to fulfil that undertaking.
2. The Better Regulation Executive (BRE) is a unit at the heart of Government, with a
principle focus of working with Departments to monitor the measurement of new
regulations that impact on business and to reduce the overall level of regulatory burden.
3. To do this, the BRE and Departments have focused on:
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understanding the regulatory issues that are of greatest concern to UK business;
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deepening their understanding of the issues of concern in their respective areas
and encouraging regulators to do the same; and
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promoting a joined-up understanding of areas of concern, which cut across
boundaries between Departments and regulators.
The first section of this note sets out what BRE, Departments and Regulators are doing to
improve their understanding of existing regulations, while the second part sets out current
progress on greater efficiency, including monitoring and evaluation.
Recommendation 3: Work to improve understanding of existing
regulations
Understanding the issues of greatest concern
4. BRE’s knowledge of the areas of greatest concern to business is based on
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engagement with business groups, trade associations and individual businesses –
both proactively and in response to their representations, which are likely to focus
on those issues or regulations that are the most costly to business;
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an in-depth survey every two years to identify business perceptions of regulation;
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evidence gathered through the Focus on Enforcement, Business Focus on
Enforcement and Cutting Red Tape programmes; and
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work by departments and regulators to understand the burdens they are placing on
business through engagement with their stakeholders on the impact of regulations.
5. For proposed new regulations, Government has a robust process of scrutiny through the
Regulatory Policy Committee (RPC) – which provides independent scrutiny of the quality
of the analysis supporting regulatory proposals – and the Reducing Regulation Cabinet
sub-Committee (RRC) which reviews Departments’ proposals before consultation and
again before they are finally implemented. There is also an opportunity for BRE to
1
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/577907/57980_Cm_9389_Treasury_Minute_
Accessible.pdf
challenge other regulations in the same policy space and to consider any proposals for
new regulation in the round. This has helped to improve consultations and has improved
intra-departmental policy discussions.
6. Over time, this information will be augmented by reviews of regulatory secondary
legislation required by the provisions of the Small, Business Enterprise and Employment
Act 2015 (SBEE). The SBEE Act provides that the relevant Minister must include a
statutory review provision in such legislation, or provide a statement as to why a review
provision would not be appropriate. For large measures with statutory review clauses, the
BRE will continue to encourage Departments to include a monitoring and evaluation plan
in the impact assessment. The provisions of SBEE apply to new or replacement
regulations, so over time the proportion of legislative regulatory stock containing PostImplementation Reviews (PIRs) should rise.
7. As previously described to the Committee, the programme of Post-Implementation
Reviews (PIR) is now beginning to come on stream. Since 2011, it has been an
administrative requirement that new statutory instruments should include a clause that
requires a post-implementation review every five years. Review clauses are
supplemented with sunset clauses2 for domestic regulatory measures with significant
regulatory impacts.
Deepening understanding of the issues of concern
8. BRE works with Departments to understand regulatory issues of concern to business.
Regulating Departments have budgets (supported by the One-In, Three-Out rule) to
reduce their regulatory impact on business over the Parliament. To comply with these
budgets, Departments need to identify areas where they can find savings for business:
since they can only do this by understanding the costs that their regulations impose on
business, the budgets provide a powerful incentive for Departments to improve their
understanding of the impact of their regulatory stock on business.
9. The BRE also provides encouragement, support and challenge to Departments to
consider particular regulatory issues of generic concern to business.
10. The Red Tape Challenge and Focus on Enforcement programmes identified that a
significant area of concern for all businesses was the impact of how regulation was
enforced. This has helped to shape and inform Government action, for example, statutory
regulators (i.e. those regulators that have a separate legal identity from Governments) will
soon for the first time contribute to the Government’s business impact target.
11. Regulators are already subject to a statutory Regulators’ Code3, which expects them to
engage with those they regulate and hear their views so that the regulator is able to
understand better the impact of their activities on business, and to ensure that they
maximise the benefits they provide to business whilst minimising negative economic
impacts.
12. Within BEIS, the Regulatory Delivery Directorate provides practical training, tools for
regulators and works collaboratively with them to support improvements in compliance
with the Regulators’ Code and, subject to Parliamentary approval, will have a similar role
in respect of the forthcoming ‘Growth Duty’.
2
Sunset clauses provide that the statutory instrument will cease to have effect after seven years unless another regulation is
laid to amend the statutory instrument to extend or remove the end date. A post-implementation review is required to justify
the need for the SI to be retained.
3
Section 23 of the Legislative and Regulatory Reform Act 2006
Cutting Red Tape
13. Building on the success of the Red Tape Challenge and Focus on Enforcement reviews,
the Government launched the Cutting Red Tape programme in July 2015. The reviews
looked at specific sectors and worked with trade associations and businesses to gather
evidence and develop a focussed and detailed understanding of the regulatory burdens on
a sector or market. BRE then worked with Departments and regulators to get them to
commit to series of actions – both statutory and non-statutory – that would address these
findings. There have been six Cutting Red Tape Reviews published so far with others due
to be published by Easter 2017.
14. These reviews have covered activities that affect tens of thousands of businesses:
together with the Red Tape Challenge, Focus on Enforcement and Business Focus on
Enforcement reviews, and the work by Departments and regulators, this has given the
BRE and Departments a considerable insight into the burdens impacting on business.
Initiatives by Departments
15. In addition to the interventions mentioned above which seek to understand directly from
business what regulations they are concerned about, some Departments have also
reviewed their stock of regulation as a whole to help improve their understanding of
regulatory issues that impact on business. This has developed good practice which BRE
will encourage other Departments to adopt - where appropriate.
Home Office
16. In support of the Government’s deregulation agenda, the Home Office carried out a
comprehensive audit of all Home Office legislation from 1850 to 2013, with the aim of
assessing the potential for deregulation in those that directly regulate business and might
be considered as in scope for the Business Impact Target. This found that 143 regulations
directly impacted on business. The Home Office has used the result of the audit to focus
attention on those 143 regulations.
Department for Education
17. The Department for Education (DfE) has thoroughly reviewed all of its relevant ‘regulatory
stock’ (including compliance and enforcement costs) that falls within the scope of the
Business Impact Target.
18. The principle purpose of DfE’s regulations is to safeguard children and young people, and
to secure good educational standards. Through its review DfE identified the regulations
that impact on business and estimated their regulatory load. Working with its stakeholders,
DfE assessed where reductions to burdens may be possible without compromising
children’s and young people’s safety or damaging educational standards. Following
analysis of the findings, DfE’s economists then developed estimates of the potential
reduction in burdens to business.
19. DfE’s independent regulators have also considered the burdens that they place on
business:

the Equality and Human Rights Commission is assessing the impact of its qualifying
regulatory provision (QRPs) on business;

the Higher Education Funding Council in England are in the process of submitting their
first QRP assessment to the RPC;

the Office of Qualifications and Examinations Regulation (Ofqual) already carry out
assessments on the changes they make in the regulation of examination and
assessment, and is also preparing to submit its first QRP assessments to RPC - it is
also reviewing systems and decision-making processes to ensure that its duty under
the Growth Duty is addressed when this comes into effect;

the Office for Standards in Education, Children's Services and Skills (Ofsted) is
simplifying its guidance.
Department for the Environment, Food and Rural Affairs
20. Defra has developed a number of products and tools to provide a full picture of the
legislation under its policy responsibility and to strengthen its oversight of policy under
development or review. These include Defra Lex, a publically accessible on-line database
of all its legislation in force, with enriched search features and information not available
elsewhere, including details on extent, enforcement bodies, consultation responses and
impact assessments. Defra uses this information to maintain a complete “Regulatory
Stock Assessment” of the costs and benefits of its regulations, including EU regulation.
An updated version of this assessment, providing information as at 1 January 2017, is due
to be published this summer alongside an overarching report on Better Regulation in
Defra. These tools are being used to support the legal analysis to prepare for future Defra
legislation and also contributed to Defra’s ability to review 1,400 regulations under the Red
Tape Challenge exercise.
Regulators
21. Subject to Parliamentary approval of secondary legislation, a wide range of regulators will
soon be under a statutory duty :
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to have regard to the desirability of economic growth4. A number of regulators (eg
the Pensions Regulator, or the Financial Conduct Authority) have had the
equivalent of a growth duty provision in their legislation for a number of years
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to report on changes they make to their regulatory policies and practices and to
assess the resulting impact on business.5.
22. Although the latter duties have yet to come into force, regulators are already acting to
improve their understanding of their impact on business.
Health and Safety Executive (HSE)
23. The HSE has carried out the following work:
a. Reform of Health and Safety Legislation – In response to Professor Ragnar
Löfstedt’s 2011 review ‘Reclaiming Health and Safety for All’ and the Cabinet Office led
Red Tape Challenge, HSE undertook a comprehensive review of its stock of over 200
pieces of legislation. HSE removed or improved 84% of health and safety regulations
by the end of the last Parliament. This included reducing the overall stock of legislation
by 50% and was achieved without compromising or diluting health and safety
protections for workers.
b. Review of HSE’s Approved Codes of Practice (ACoPs) – HSE reduced the page
count of ACoP material by 40%. Changes to ACoPs, which have legal standing, go
4
Section 108 and 109 of the Deregulation Act 2015
Section 22(9) Small Business, Enterprise and Employment Act 2015 as amended by s14 of Section 22(9) Small Business,
Enterprise and Employment Act 2015
5
beyond a simple reduction in page quantity. Changes have been designed to simplify
requirements and remove burdens where possible, as well as improving the usability of
the documents through clarity of presentation and language.
c. Review of HSE’s guidance - HSE reduced the number of guidance pages by 60%.
The review was targeted to provide resources for business that give practical advice
and allow a proportionate approach in complying with health and safety law. This
means removing duplication, combining publications to present information in the most
appropriate manner for the audience and the withdrawal of guidance no longer relevant
or where industry has taken the lead.
d. Introduction of the LA Code – Published in May 2013, the Code sets out the risk
based approach to targeting health and safety interventions that LA regulators should
follow. LA regulators have reduced their proactive inspections, from a baseline of
118,000 in 2009/10 to 6,300 in 20013/14, representing a 95% drop.
e. Focus on enforcement – The government led Chemicals Sector Review delivered
significant benefits to business by integrating previously separate COMAH (Control of
Major Accident Hazards) and environment protection inspections to remove
unnecessary duplication and overlap.
Promote a joined-up understanding of cross-cutting issues
24. Some issues cut across multiple Departments and regulators. Given the risk of uncertain
accountability for addressing them, BRE has put particular focus on these in its
programme of reviews. These are run in by BRE partnership with the relevant
Departments and regulators.
25. The Focus on Enforcement review programme looked at how selected sectors were
affected by regulations that were the responsibility of a number of Departments and
regulators. For example it delivered a greater understanding – and resolution – of issues in
coastal developments: the review resulted in the signing of a Coastal Concordat by the
Environment Agency, Natural England, the Marine Management Organisation and the
Local Government Association which provides a single point of entry, guiding applicants to
the bodies they need for range of consents, licences, permissions etc. It has also looked at
multi-regulator, multi-department impacts on areas such as small food manufacturers,
chemicals, volunteer events and adult care homes
26. Leaving the European Union and the launch of the Industrial Strategy present Government
with a range of opportunities to ensure that the future regulatory landscape is as efficient
and effective as it can be to support growth, innovation and productivity. In the immediate
future there will be major challenge for Departments to understand the stock of regulations
that directly and indirectly implements 45 years’ worth of EU law.
Recommendation 6: BRE plans for a more proportionate
approach to the assessment and validation of the small number
of regulations with the greatest impacts
27. The Better Regulation Executive, in partnership with Departments and the Regulatory
Policy Committee, conducted an efficiency review of the better regulation framework
between April and October 2016.
28. The aim of the review was to ensure that analytical and scrutiny resources across
Government are appropriately focused on the most significant measures. The Regulatory
Policy Committee (RPC) supports the Government’s goal to ensure that limited analytical
resources are deployed proportionately in support of the most significant Ministerial
decisions.
29. The outcomes of the efficiency review are part of a continuing process of review of the
framework, which was previously assessed in 2012 and 2015. Government remains
committed to making the better regulation system more proportionate and efficient in the
light of experience.
30. BRE and Departments will be monitoring the effectiveness of the efficiency proposals once
implemented and will evaluate the success of the changes to the system within 12 months.
Progress to date
31. Prior to bringing forward a package of changes, the shape of which is still being
considered across departments, BRE has already begun work to simplify processes and
clarify requirements of the better regulation system. These include:
reviewing the appropriate scale of business cost/benefit rounding to be used in scoring
for the BIT;

developing a new validation impact assessment template to encourage proportionate
assessment of low-impact measures;

developing tools such as a quick-start guide to help officials to understand the better
regulation process and what information is required when.
32. Separately, the independent Regulatory Policy Committee have already committed to:

Set out explicitly expectations of proportionate analysis so that Departments and
stakeholders have a clear understanding of what degree of analysis is appropriate to
decisions at different scales of likely impact;

Comment explicitly in Opinions on the proportionality of the analysis presented, and on
where presenting less information might have been proportionate and appropriate;

Continue to work with Departments to ensure that scrutiny processes for their highestpriority measures (and especially of deregulatory measures) do not unnecessarily delay
their work;

Continue to work with Departments to ensure that they take appropriate advantage of
flexibilities in the regulatory scrutiny system (for example, by completing appropriate
analysis of primary regulation to reduce the analysis/resource required around
secondary legislation);

Continue to improve dialogue with Departments so that more frequent issues are
identified and dealt with outside the formal submission process and Departments can
raise their concerns about proportionality and process.
33. Government will provide a fuller update to the PAC in July setting out the further changes
that it will take to improve the efficiency of the better regulation system.