An outcomes-focused approach, however, can present a challenge for regulators and policymakers in measuring the influence or impact of regulation and the level of compliance by industry. A regulator’s influence over the industry it regulates—for example, how well businesses comply with standards—can be difficult to measure, particularly if there are not specific rules that can be easily monitored.38 For this reason, it is imperative that regulators identify what data they need, collect this robustly and systematically, use it to monitor progress and have the power to act on it effectively. Failing to collect reliable data, or being unable to act on data effectively, can undermine a regulator’s objectives.39 One London borough submitted evidence to us highlighting how the level of fines on water companies is not sufficient in deterring them from discharging raw sewage into the environment above the levels permitted by the Environment Agency.40 32 Competition and Markets Authority, Regulation and Competition: A Review of the Evidence, January 2020 33 Qq 67–70 34 NAO Report, page 31 35 Q 36 36 Centre for the Study of Existential Risk, University of Cambridge 37 Qq 65, 84 38 Q 46; NAO Report, pages 21 & 26 39 NAO Report, pages 15 & 19 40 London Borough of Hackney 14 Principles of effective regulation