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