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Government to transform frontline business inspections


BIS Department for Business Innovation and Skills - Expert Author

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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.


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.

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Article Published/Sorted/Amended on Scopulus 2011-12-07 11:31:21 in Business Articles

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