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The RPC’s response to the Smarter Regulation White Paper

Posted by: , Posted on: - Categories: Better regulation, Evaluation, Independent scrutiny

Yesterday, the Government published its White Paper: ‘Regulation for Innovation, Investment and Growth: Working with Regulators to Deliver a World-Class Service’. The RPC welcomes the White Paper and the Government’s ongoing efforts to improve the quality of regulation. We look forward to working with the Government to ensure that these commitments are delivered effectively. However, there are areas where the Government could go further, in particular with efforts to strengthen the Better Regulation Framework.

The Government’s White Paper sets out 23 proposed reforms across three broad areas: how to change culture so that regulation is delivered as a service; how to improve regulatory guidance, duties and accountability; and how government can lead by example to better support regulators.

Three of the Government’s proposed reforms will directly involve the RPC:

  • Reform 14 - The Government will work with major regulators and the Regulatory Policy Committee to establish a voluntary regime of independent scrutiny of regulators' cost-benefit analysis.
  • Reform 20 - The Government will strengthen the Better Regulation Framework to apply a higher standard of scrutiny within government to regulatory proposals within the scope of the framework that:
    • are not supported by an options assessment and/or impact assessment that are judged to be fit for purpose by the Regulatory Policy Committee; or
    • are not supported by a post implementation review of existing regulation, where one is required.
  • Reform 22 - The Government will support the independent Regulatory Policy Committee to publish data that enables the scrutiny of departments’ performance against the Better Regulation Framework, including completion of post implementation reviews.

We welcome proposals to establish independent scrutiny of regulators’ cost-benefit analysis (Reform 14). Under the updated Better Regulation Framework, provisions made by regulators are not in scope of the Framework and therefore do not receive RPC scrutiny. Independent scrutiny would help to improve the robustness of the regulators’ analysis and provide comfort to stakeholders over its quality and effectiveness. We hope that this proposal will be taken up by many of the regulators; we will publish a list of those regulators that have agreed to independent scrutiny of their cost-benefit analysis.

We likewise welcome proposals to strengthen the Better Regulation Framework (Reform 20). For the framework to work effectively, when we issue an opinion that an assessment is not fit for purpose, or where there is no post-implementation review of existing regulation, there needs to be a clear mechanism for the Government and Parliament to take this into account in deciding whether to proceed with the policy – for example the Danish system has a ‘comply or explain’ approach, where their government has to justify any decision to proceed with legislation that has been red rated by their regulatory scrutiny body.

In addition, we believe that there is more that can be done to ‘strengthen’ the Better Regulation Framework. We continue to question the exemption of building safety regulations from the Framework. We do not agree with the justification in the White Paper (footnote 33) that these regulatory provisions are somehow different because they deal with citizen’s lives and wellbeing and can have tragic consequences when Government gets them wrong – the same is true of many other regulations that fall under the Better Regulation Framework. As a result of the exemption, these regulations do not receive the same, independent scrutiny of the quality of the impact, or options assessments as other Government regulatory proposals. A recent report on regulation from the Centre for Policy Studies criticises a DLUHC regulation requiring a second staircase in buildings that are more than 18m tall. They comment that DLUHC’s estimate of the cost of the measure: “appears to be out by an order of magnitude. Yet there is no way for anyone outside DLUHC to challenge the figures, not least because the new Better Regulation Framework exempts ‘regulatory provisions for the safety of tenants, residents and occupants in buildings’ from independent scrutiny”.

We also agree with the emphasis on the importance of completing Post-Implementation Reviews (PIRs) of existing regulation before introducing new regulations. Another proposal in the White Paper (Reform 21) suggests that departments should “consider the merits of using ‘sunset’ or expiry clauses in secondary legislation to allow for the removal of regulatory provisions whose necessity and effectiveness is not confirmed by suitable monitoring and evaluation.” Given that PIRs are already a statutory requirement (although a requirement that is not complied with in the majority of cases), we strongly support the initiatives to ensure that they are properly undertaken on a more comprehensive basis, and would like Government (and individual Ministers) to give greater priority to their responsibility to meet these requirements.

We welcome the Government’s commitment to support our publication of data on departments’ performance against the Better Regulation Framework (Reform 22). We believe that the transparency and accountability that this provides will help to strengthen adherence to and delivery of the Framework. To this end, our next blog-post will include a spreadsheet summarising the gradings and ratings of all the 140 Impact Assessments that we have reviewed over the last two years – this will allow stakeholders to compare the quality of IAs produced by different government departments. We will follow this up with publication of PIR ratings and also upcoming PIR requirements, so that it will be clear when departments miss their statutory PIR deadlines.

As the updated Framework completes its transition period and is fully implemented across government, we hope that the Government will continue to strengthen the Framework to achieve the full benefits of an effective and comprehensive regulatory programme. We welcome the Government’s efforts and ambition in the White Paper and look forward to its speedy implementation to ensure that the UK’s regulatory approach remains one of the best in the world.

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