Sixteenth Report - Principles of effective regulation

Select Committee

Public Accounts Committee HC 176 15 September 2021

Report Status Government responded

Conclusions & Recommendations 18 items (6 recs)

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Government Response (AI assessment · 17 of 18 classified)

Accepted 1

Acknowledged 1

Deferred 4

Not Addressed 11

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Sixteenth report from Session 2021-22 · published 8 Nov 2021

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Recommendations & Conclusions

12 results

5 Recommendation Not Addressed

Outcomes-based regulation comes with benefits, but also presents challenges for regulators in measuring their influence...

Recommendation

Outcomes-based regulation comes with benefits, but also presents challenges for regulators in measuring their influence and compliance by industry. In general, setting goals and facilitating business to meet them can be both a more effective and a less burdensome approach … Read more

Government Response Summary

The government's response is completely irrelevant to the committee's recommendation regarding outcomes-based regulation and data collection, instead discussing the BBC's audience decline.

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1 Conclusion Not Addressed

On the basis of a report by the National Audit Office, we took evidence from...

Conclusion

On the basis of a report by the National Audit Office, we took evidence from the Department for Business, Energy and Industrial Strategy (the Department), and from the Environment Agency, the Health and Safety Executive (HSE) and the Office of … Read more

Government Response Summary

The government's response is an introductory statement that acknowledges the committee's process of taking evidence and publishing its report, serving as an introduction to the government's full response.

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7 Conclusion Not Addressed

The Government’s 2019 White Paper ‘Regulation for the 4th Industrial Revolution’ found that only 29%...

Conclusion

The Government’s 2019 White Paper ‘Regulation for the 4th Industrial Revolution’ found that only 29% of businesses believed that “government’s approach to regulation facilitates innovative products and services being efficiently brought to market”.9 The Department explained that enabling innovation and … Read more The Government’s 2019 White Paper ‘Regulation for the 4th Industrial Revolution’ found that only 29% of businesses believed that “government’s approach to regulation facilitates innovative products and services being efficiently brought to market”.9 The Department explained that enabling innovation and innovative sectors to grow has been a central plank of the work that it has been doing on regulation over the past few years. The Government’s Regulatory Horizons Council focuses on looking at cross-cutting issues and specific sectors, and the Department has established the Regulators’ Pioneer Fund which has made £13m available to regulators so far in individual ring-fenced pockets of funding. The Department cited the Financial Conduct Authority’s (FCA’s) regulatory ‘sandbox’ to encourage and test innovations in financial services that has existed for a number of years and is widely respected.10 The FCA’s regulatory sandbox is a mechanism for firms to test innovations for limited duration with a limited number of customers. To date, the FCA has worked with a defined cohort of firms but is also launching an ‘Always Open’ regulatory sandbox available on a rolling basis. It is open to authorised firms and some other businesses that are looking to deliver innovation in the UK financial services market. The FCA’s sandbox seeks to provide firms with: the ability to test products and services in a controlled environment; reduced time to bring innovations to market, at potentially lower cost; support in identifying appropriate consumer protection safeguards to build into new products and services; and better access to finance. We heard that Ofgem and the Civil Aviation Authority have also more recently launched their own regulatory sandboxes (for example, for the use of drones for freight delivery).11 We were surprised, however, given the importance of innovation to the economy, that the sandbox approach is a not a default model for all or even most regulators.12 Show less

Government Response Summary

The government's response addresses a related recommendation about requiring regulators to adopt innovation-friendly approaches like sandboxes, but does not directly engage with this conclusion expressing surprise that sandboxes are not a default model.

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8 Conclusion

The Department told us that the UK is ranked highly in terms of regulatory policy...

Conclusion

The Department told us that the UK is ranked highly in terms of regulatory policy and competitiveness by international bodies such as the OECD, the World Bank and the World Economic Forum (WEF). We heard that the Department seeks to … Read more

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9 Conclusion Not Addressed

Rapid technological development is altering traditional business and commerce, the climate emergency is driving changes...

Conclusion

Rapid technological development is altering traditional business and commerce, the climate emergency is driving changes in business and consumer behaviour, and changing social attitudes are shifting citizens’ expectations of regulators. The UK’s exit from the EU has also created both … Read more

Government Response Summary

The government's response addresses a related recommendation about ensuring regulatory frameworks are responsive to major changes and post-EU departure opportunities, outlining principles from a consultation, but does not directly engage with this conclusion detailing the drivers of change.

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10 Conclusion Not Addressed

Ofcom, the Environment Agency and the HSE all stated that mitigating the risks and maximising...

Conclusion

Ofcom, the Environment Agency and the HSE all stated that mitigating the risks and maximising the opportunities of change in their sectors as a key challenge for them as regulators. For Ofcom, new technology has disrupted traditional business models and … Read more

Government Response Summary

The government's response addresses a related recommendation about regulatory frameworks adapting to post-EU changes, outlining principles from a consultation, but does not specifically engage with this conclusion detailing challenges faced by individual regulators.

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11 Conclusion Not Addressed

To meet these challenges and opportunities, regulators need to recruit and retain the right staff,...

Conclusion

To meet these challenges and opportunities, regulators need to recruit and retain the right staff, collaborate effectively both domestically and internationally, and exploit new technology to improve their efficiency and effectiveness. Ofcom has recruited a new chief technology officer from … Read more

Government Response Summary

The government's response addresses a related recommendation about regulatory frameworks adapting to post-EU changes, outlining principles from a consultation, but does not specifically engage with this conclusion regarding regulator staffing, collaboration, and technology use.

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12 Conclusion Not Addressed

The Department views its role as supporting coordination and dissemination of best practice across the...

Conclusion

The Department views its role as supporting coordination and dissemination of best practice across the regulatory system. However, it told us it is the responsibility of individual sponsoring departments to provide appropriate governance of regulatory bodies, including oversight of value … Read more

Government Response Summary

The government's response mentions agreeing to an unprovided recommendation, discussing learning from the COVID-19 pandemic and future regulatory reform consultations, but does not directly address this conclusion about the Department's view of its role in regulatory oversight.

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13 Conclusion Not Addressed

Robust performance measurement and evaluation, including analysis of the costs and benefits of regulatory activity,...

Conclusion

Robust performance measurement and evaluation, including analysis of the costs and benefits of regulatory activity, are essential for effective regulation. They can help evidence value for money, provide insight into unintended outcomes, and help to refine interventions to improve outcomes. … Read more

Government Response Summary

The government's response addresses a related recommendation about the Business Impact Target and regulatory cost/benefit analysis, but does not specifically engage with this conclusion regarding the importance of robust performance measurement and evaluation.

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14 Conclusion Not Addressed

We questioned Ofcom, the Environment Agency and the HSE on the extent to which they...

Conclusion

We questioned Ofcom, the Environment Agency and the HSE on the extent to which they are able to capture the cost of their regulations on their sectors. Ofcom told us it is stepping up its efforts to measure its impact … Read more

Government Response Summary

The government's response addresses a related recommendation about the Business Impact Target and regulatory cost/benefit analysis, but does not specifically engage with this conclusion regarding regulator difficulties in capturing costs and benefits.

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15 Conclusion Not Addressed

The government’s Business Impact Target is set each Parliament and aims to reduce the costs...

Conclusion

The government’s Business Impact Target is set each Parliament and aims to reduce the costs of regulation to business. Regulators must carry out Regulatory Impact Assessments (RIAs) on qualifying regulations to determine their impacts on business. Where these assessments identify … Read more

Government Response Summary

The government's response addresses a related recommendation about the Business Impact Target and regulatory cost/benefit analysis, but does not specifically engage with the conclusion provided in this item describing the existing BIT and RIA process.

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18 Recommendation Not Addressed

An outcomes-focused approach, however, can present a challenge for regulators and policymakers in measuring the...

Recommendation

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 … Read more

Government Response Summary

The government provides a generic response about balancing regulatory approaches and referring to an ongoing consultation, but does not specifically address the imperative for regulators to robustly identify, collect, and act on data.

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