Win Win Win: can we have regulation that protects people, supports business and costs less?
Graham Russell Director Better Regulation Delivery Office
Current Issues
•Primary Authority Extension
•Competency
•Growth Duty and Code
What is better regulation and where has BRDO come from and where is it going?
1.UK Better Regulation Principles •Targeted•Accountable•Consistent•Transparent•Proportionate2.Hampton Review, Anderson, Macrory and Rogers Reviews
3.BRDO priorities are:• Primary Authority and business engagement• Simplifying regulatory delivery
The Local Better Regulation Office (now BRDO)
• Established in 2007• Delivery of regulation at the local level• Six statutory functions• Staff team of around 25• Expertise in inspection and enforcement, policy,
research and evaluation• Annual budget of £3.7 million grant in aid• Remit: trading standards, environmental health,
licensing and fire
Policy context - the Regulatory Landscape in numbers
12 different government departments making regulations or regulatory policyOver 60 national regulators involved in policy and deliveryOver 200 pieces of legislation in scopeDelivered by 433 local authoritiesRepresenting 1% of local government spendContributing to 48 different outcomes
BRDO
The regulatory policy agendaRule making
•Reduction of unnecessary burdens on business•Change in policy making culture - regulation only when necessary
– One in one out– Red Tape Challenge– Alternatives to regulation– Regulatory impact
assessment
Regulatory Delivery•Reduction of unnecessary burdens on business•Risk based, targeted, proportionate•Change in culture
– Better inspections– Consistent enforcement– Alternatives to
regulation– Post implementation
review
Good regulation is:...choosing the right methods to move from
risk to outcomes
Risks OutcomesInterventions
Intervention Strategies
Regulatory outcomes
Place People
Production
Green Growth
Safe Communities
Environment
Economy
Society
Prosperous communities
Quality of life
•In March 2012 BRDO published a paper ‘Regulation and Growth’•Demonstrates how good regulatory delivery can also be good business
Regulation and Growth
•‘Good’ regulation can support growth, as much as ‘poor’ regulation hinders it
•The way regulation is delivered (enforcement) matters
•Key aspects of delivery include:- Right level regulation-local/regional/national- Hearing business as the ‘customer’ of regulation
Prosperity and Protection
We believe that, delivered well, regulation can create the conditions for economic growth by:
• reducing business costs; • increasing profitability through confidence and
control over business processes; and • delivering wider economic impacts
Good Regulatory Delivery = Growth for Business
•Minimises transactional costs
•Mitigates regulatory risks
•Minimises reputational costs
Reduce Business Costs
• Provides day-to-day management control
• Ensures recognition for investment in compliance
• Enables confident future planning and investment
Increase Confidence and Control
• Ensures a level playing field
• Provides local community benefits to businesses and citizens
• Contributes to shared outcomes at a national level
Realise Wider Economic Benefits
• New EU requirements might increase compliance costs for 400,000 SMEs• An optional, business friendly management system• Contains a pull out step-by-step checklist and diary pages to record checks and was tailored to different business sectors
87% of SMEs reported that it helped them manage their businesses
45% felt that it made their businesses more profitable
Safer Food, Better Business: Food Standards Agency
Why use risk based approaches?
•More efficient and effective•Target resources•Reduce burdens on business•More transparent to business
Strategic approach to risk
National Priorities
National Threats
National Regulators’ Strategies
Central Government Direction
Local Priorities
Socio- demographic
Environment
Tradition / culture
Local democracy
Place Shaping
Regional
Strategic Analysis
Strategy
Delivery
Evidence Based Perception v Reality
Prioritisation Local / National
Intelligence Assessment
Profile of businesses
Higher Risk
Medium
Lower risk
Risk....
Information
Analysis
Intelligence
Risk = Hazard x Likelihood
Specialist Intervention
GenericAssessment
Earned Recognition Reduces Risk
Common Risk Framework
Common Assessment
of Likelihood of Compliance
Sector Specific Hazard
X
Higher Risk
Medium
Lower Risk
Poor Compliance
Record Increases Risk
Risk Based Targeting Advice and Inspection
Deter
rence
mea
sure
s Gradual escalation
Cooperative measures
Proportionate Risk Based Sanctions
• Mutual understanding and tailored approaches ‘progressive partnerships’
• Businesses as customers
• Better communication to reduce uncertainty and build business confidence
• Inter-agency working and recognition of investment in compliance to inform inspections
• Commercial awareness, ‘softer skills’ in training/CPD
From the business end of the telescope - insights
Why are you here?
Rules vs Culture
• Rules set the standard, but culture amongst both businesses and regulators is crucial
• A judgment-based approach to regulation can achieve better outcomes than a box-ticking, rules-based approach
1. Context
2. Leadership – Vision, Awareness, Change
3. Competency
4. Performance Frameworks
Elements of changing the regulatory culture