Government to transform frontline business inspections
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07 December 2011 - BIS
Plans to change the way that
businesses experience ‘frontline enforcement’, such as business
inspections, were set out today by Business Secretary Vince Cable,
including a full scale review of UK regulatory bodies and moves to cut
the number of inspections for ‘compliant’ firms.
Details were published as
part of the Government’s response to the Transforming
Regulatory Enforcement consultation setting out how the
Government will have a more mature and open relationship with
businesses when it comes to regulatory enforcement, along with plans
for a more transparent and light-touch system and the creation of a
Better Regulation Delivery Office.
Dr Cable said:
“Business has said clearly that regulatory enforcement is too often
heavy-handed, inefficient and risk-averse – all of which drains
productive businesses of time and resources. They also cited examples
of good practice that we need to capture and build on. That’s why we’re
introducing a review of all regulators.
“We will also move to a
transparent and light-touch system based on real risks, including
extending the successful Primary Authority scheme and bringing the
Local Better Regulation Office (LBRO) into government as a new Better
Regulation Delivery Office.
“We will end the tick-box
approach to inspection, including establishing sunset review clauses on
most new statutory regulators created in the future.”
Minister
of State for Business and Enterprise Mark Prisk said:
"We have made good progress
against excessive regulation already by reducing the impact of red tape
on businesses through the radical system of One-in, One-out, the
three-year micro-business moratorium and the Red Tape Challenge.
"Now is the time to broaden
the scope of the deregulatory campaign by putting in place a
comprehensive review of UK regulatory bodies. Our aim is ambitious - to
fundamentally change not just regulations, but also how they're
enforced."
During the summer the Government consulted with businesses to gather
their views on where reform of enforcement was needed and where current
approaches to enforcing regulation could be lightened or made to work
in more constructive ways.
The response sets out the Government’s plans to transform business’
experience of regulation at the front line, including:
* A review of all
regulators, not just to examine the case for continued existence, but
to make sure each one is making the fullest possible use of
alternatives to conventional enforcement methods, working with business
and others and reducing state activity wherever possible.
* Making greater use of
‘earned recognition’, so that compliant businesses are subject to fewer
inspections and unnecessary regulatory action.
* Doing away with the
assumption that compliance is something for the State to enforce alone,
moving to a presumption that regulators should work with business
through ‘co-regulation’ wherever possible.
* Working with businesses,
through local enterprise partnerships and local authorities, to promote
better local regulation.
* A presumption that
regulators should help businesses comply with the law.
* Establishing the principle
that no business should face a sanction for simply having asked a
regulatory authority for advice.
The Government will also
introduce changes to the Primary Authority scheme to improve the
coherence, accountability and transparency of local regulation. This
will involve strengthening inspection plans to deliver earned
recognition for business; allowing more organisations to participate,
benefiting small business; and including specific policy areas which
are currently out of scope: under-age sales of knives, gambling, and
fire safety.
The Government will also
introduce sunset review clauses on most new statutory regulators
created in the future. It will also retain the Regulator’s Compliance
Code, giving it a higher profile, making sure it is understood by
customers and placing it at the heart of reviews of regulators. And
government departments will have to consider carefully the costs of
enforcement for business and the taxpayer.
The LBRO will be
reconstituted as the Better Regulation Delivery Office (BRDO) within
the Department for Business, Innovation and Skills, operating alongside
the Better Regulation Executive to deliver a coherent programme of
regulatory reform, and providing comprehensive advice and support to UK
and Welsh Ministers.
This comprehensive package
of measures will transform the culture of enforcement so that
businesses will see a real difference, becoming more like customers
rather than simply on the receiving end, of the regulatory enforcement
system.
Notes
1. In May 2010, the Government announced a new approach to
regulation: to reduce the burdens felt by businesses and create a
business environment that promotes growth and enterprise. A
business-led economic recovery will depend, at least in part, on our
ability to get to grips with every aspect of regulatory enforcement
that restricts the ability of businesses to grow, creating jobs and
prosperity, without reducing the important protections essential to a
mature democratic society.
2. The Government’s approach to reducing the burden of
regulation has 3 key parts:
* domestically we have brought in
tough controls on the flow of new regulation, to ensure that the UK
government does not increase the financial burden of regulation on UK
business
* We are going through the entire stock of existing UK
regulation – and we are identifying many hundreds of existing
regulations that can be simplified, liberalised, or removed altogether.
* pushing hard within the EU for
an outcomes-focused approach to regulation, based on a real
understanding of its impact, and for the EU as a whole to take
deregulation seriously
3. The Government carried out a comprehensive review of public
bodies in 2010 as part of the commitment to radically increase the
transparency and accountability of all public services. The review of
the Local Better Regulation Office (LBRO) concluded there were
advantages in it ceasing to operate as a Non-Departmental Public Body
and instead moving to become part of the Department for Business,
Innovation and Skills (BIS).
4. The reviews will follow a two-stage approach: a
comprehensive evidence-gathering stage to build a detailed view of the
entire regulatory landscape; before undertaking further decisions on a
prioritised programme of reviews in spring next year.
5. Economic regulators (Ofgem, Ofwat, Ofcom, the Civil
Aviation Authority and the Office for Rail Regulation) and new
regulators in the financial services and nuclear sector will be
excluded from the policy on sunset clauses.
About the Author
© Crown Copyright. Material taken from the BIS Department for Business, Innovation and Skills. Reproduced under the terms and conditions of the Click-Use Licence.
