Hampton Review

The review recommends that all regulatory activity should be on the basis of a clear, comprehensive risk assessment. The risk assessment should: • be open to scrutiny; • be balanced in including past performance and potential future risk; • use all available good quality data; • be implemented uniformly and impartially; • be expressed simply, preferably mathematically; • be dynamic not static; • be carried through into funding decisions; • incorporate deterrent effects; and • always include a small element of random inspection.

As part of its work, the Better Regulation Executive’s review of penalties should consider the possible benefits of introducing restitutive justice and/or restorative justice orders.

The review recommends that the Better Regulation Executive should encourage regulators to adopt positive incentive schemes. Local authority schemes should be coordinated through the National Regulatory Forum, with national standards and national branding.

The review recommends that, to make regulators more accountable for the way in which they do their work, the principles and recommendations in this report should apply to all regulators within the scope of the review. They should be a basis for all regulators’ assessments and self-assessments, and the Better Regulation Executive should be responsible for monitoring regulators’ compliance with them. The BRE should also consider the scope for incorporating the principles into all regulators’ legal duties.

The review recommends that the Better Regulation Executive should consider whether the principles and practices set out here should be extended to regulators outside the scope of the review.

The review recommends that the Better Regulation Executive commissions a set of Form Design Guidelines, and that all regulators should adhere to them.

The review recommends that all regulators set up business reference groups on a sectoral basis and involve them at all stages when introducing a new form, including form design. The reference group should vet the design of forms.

The review recommends that paperwork and form filling become a greater part of the Regulatory Impact Assessment process. When proposing a form to the business reference groups, all regulators should be expected to show: • that the data required is not available from other sources; • whether data requests can be varied according to a company’s risk; • that the data required can be collected in a way that fits with the requirements of business, and other regulators who collect similar data; and • a cost-benefit analysis of the data request.

The review recommends that regulators pro-actively investigate ways in which their data requirements could be met by transferring information from businesses’ systems. When these are used, they should be: • designed in partnership with the bodies who will use them; • enable open standards for data sharing with other regulators and, where appropriate, corporate software; and • be integrated with other regulatory databases.

When designing new forms, all regulators should include a statement detailing how long they will take to complete and separating out: • the time taken to comprehend the form; • the time taken to gather the data; and • the time taken to fill and return the form. The forms should also include a field where those filling in the forms can say whether the time estimates were right, too long, or too short. In this way the data set will improve over time. This information should also be absorbed into existing forms as soon as feasible.

All regulators should keep a tally of how many forms they issue, and publish an assessment in their annual reports, setting out the amount of time that businesses spent filling in their forms, and progress in reducing burdens.

When publishing a risk assessment for a category of inspections, regulators should identify other institutions with which they propose to conduct joint inspections, and the proportion of inspections that will be carried out jointly.

The review recommends that the Better Regulation Executive convene a working group of regulators, comprising those responsible for data handling and storage. That working group should: • undertake or commission an assessment of how long consolidation will take, and broad cost estimates, on the assumption that no currently working database will be closed down solely for the purpose of incorporation; • present a paper to the Prime Minister’s Panel on Regulatory Accountability setting out different possible timescales for consolidation of databases, indicative costs, and benefits in terms of reductions to the administrative burden on business; and • lead the process of consolidation, to the timetable set by the Prime Minister’s Panel on Regulatory Accountability. The database should be organised in such a way that regulators are only able to see the information that applies to their sphere of activity, plus publicly available information.

The review recommends that – in pursuit of the goal of a single data set – no new database or significant change to IT systems should go ahead unless the Better Regulation Executive has agreed its implementation.

The review recommends that, for avoidance of doubt on data sharing rules, the Better Regulation Executive should seek formal guidance from the Information Commission on the data protection issues surrounding the sharing of regulatory data.

Every Regulatory Impact Assessment (RIA) should include, in addition to information on regulatory costs, an assessment of the practicality of enforcement, setting out: • which regulator will enforce the regulation; • the extent to which existing forms, systems, inspection regimes and penalty regimes can be used to secure the desired regulatory outcome; • the outline of the risk assessment to be used in programming inspections; and • the sources and nature of advice to be provided both at the introduction of the regulation, and while it is in force.

The Better Regulation Executive should be consulted if the establishment of a new regulator is being contemplated. The BRE should oppose the establishment of new regulators if any existing regulator is able to carry out the task effectively.

The administration of new policies and regulations should be based on the principles set out in Box 2.2 of this report, with no new regulators set up without the approval of the Better Regulation Executive.

As part of the enforcement assessment in Regulatory Impact Assessments, those proposing the collection of data should show that they have assessed all data available to the regulators, that none of the data available fits their needs, and that the benefits of gathering extra information outweigh the costs both to Government and to business. They should also provide an assessment of the extent to which existing forms or collection mechanisms can be used to gather the required data.

The review recommends that, as part of the enforcement assessment in Regulatory Impact Assessments, regulators should publish an assessment of compliance probabilities and strategies, structured according to the Table of Eleven.

The review recommends that, over the next two to four years, 31 of the 63 national regulators should be consolidated into the following seven bodies: • an expanded Health and Safety Executive; • an expanded Food Standards Agency; • an expanded Environment Agency; • a new consumer and trading standards agency; • a new rural and countryside inspectorate (the new integrated agency); • a new animal health inspectorate; and • a new agricultural inspectorate.

The review recommends that the Companies Investigations Branch of the DTI be merged with the Insolvency Service Agency.

All regulators should provide broad-reach advice to businesses through: • web sites, which should give businesses an opportunity to personalise the information they see; and • news letters online and on paper, devised for particular sectors, and including the latest information on regulation, and contact details for the regulator.

The review recommends that the new consumer and trading standards agency should be established, as described in Chapter 4, with powers over trading standards work (excluding food and animal welfare) analogous to those of the Food Standards Agency over food.

The review recommends that the Better Regulation Executive lead the process of merger across Government, co-ordinating the work of merger teams in either regulators or the relevant Department.

The review recommends that the Better Regulation Executive should establish and chair a National Regulatory Forum comprising local authority, national regulator and policy Department representation.

The review recommends that the National Regulatory Forum should lead a programme of work, through its member organisations, to: • improve the coordination of local and national regulatory services; • secure agreement on common services, or central communication strategies, to be provided centrally or regionally; and • agree risk assessment arrangements, and monitor the extent to which local authority regulators apply them.

The review recommends that the Government establish a Better Regulation Executive at the centre of Government, to hold regulators to account for their performance against the principles of regulatory enforcement, set out in Box 2.2. The BRE’s role should be as described in Chapter 4.

The review recommends that the Government consider whether the functions currently exercised by the Regulatory Impact Unit should transfer to the Better Regulation Executive.

All regulators should judge the effectiveness of their advice by monitoring business awareness and understanding of regulations.

Regulators should make on-site advice visits and tailored advice available to businesses.

The Government has made proposals to increase fine maxima in magistrates’ courts, and to give magistrates more power to set fines that are an effective deterrent. The review recommends that these proposals should be extended to all regulators. D

The review recommends that the Sentencing Guidelines Council should consider new guidance to courts on regulatory offences, including guidance on fine levels and setting fines that take full account of economic benefit gained.

The review recommends that the Better Regulation Executive (see Chapter 4) should undertake a comprehensive review of regulators’ penalty regimes, with the aim of making them more consistent. Administrative penalties should be introduced as an extra tool for all regulators, with the right of appeal to magistrates’ courts unless appeals mechanisms to tribunals or similar bodies already exist. As part of that review penalty powers should be established in such a way that offenders can be deprived of all the economic benefit of long- term illegal activity.

The review recommends that, two to three years after the introduction of administrative penalties, the Better Regulation Executive should review whether appeals to magistrates’ courts are being dealt with effectively, and whether a Regulatory Tribunal Service, using specialist judges, should be established to hear appeals.