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December 7, 2011

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Government outlines path to light-touch regulation

The Government has announced its intention to expand and extend the Local Better Regulation Office’s (LBRO) Primary Authority scheme as part of a package of plans to transform ‘front-line enforcement’ for businesses.

During the summer the Government asked businesses to outline where reform of enforcement is needed as part of the ‘Transforming Regulatory Enforcement’ consultation. Publishing its response today (7 December), the Government said it wants businesses to become more like customers, rather than being simply on the receiving end of the regulatory enforcement system.

Its plans include:

  • a review of all regulators, not just to examine the case for continued existence but to make sure each one is making the fullest possible use of alternatives to conventional enforcement methods, working with business and others, and reducing State activity wherever possible;
  • making more use of ‘earned recognition’ for businesses, so that if businesses are already compliant, regulators recognise this and focus their inspection activities elsewhere;
  • moving to a presumption that regulators should work with business through ‘co-regulation’ wherever possible;
  • working with businesses, through local enterprise partnerships and local authorities, to promote better local regulation; and
  • establishing the principle that no business should face a sanction for simply having asked a regulatory authority for advice.

On this final point, the Government said exceptions to this principle would be defined and would most likely include where there is an emergency, or imminent risk to health and safety.

The Government will also introduce changes to the Primary Authority scheme, which involves a specific local authority serving as a company’s first point of call for regulatory advice. The changes will involve strengthening inspection plans to deliver earned recognition for businesses; allowing more organisations to participate – for example, by allowing trade associations to receive and distribute ‘assured advice’ from a Primary Authority that protects its members from prosecution if it has been followed; and expanding the scheme to cover policy areas that are currently beyond its remit, including, subject to pilots being carried out, fire safety.

As set out in the Government’s response to Professor Ragnar Löfstedt’s review of health and safety legislation, the HSE will work closely with the LBRO to ensure that the scheme delivers “reductions in burdens, and increased consistency of approach, in line with HSE policy”.

Commenting on the plans, Business Secretary Vince Cable said: “Business has said clearly that regulatory enforcement is, too often, heavy-handed, inefficient and risk-averse – all of which drains productive businesses of time and resources. They also cited examples of good practice that we need to capture and build on. That’s why we’re introducing a review of all regulators.

“We will also move to a transparent and light-touch system based on real risks, including extending the successful Primary Authority scheme and bringing the Local Better Regulation Office (LBRO) into government as a new Better Regulation Delivery Office.”

The organisation’s chief executive Graham Russell said: “We welcome the Government’s decision to make these changes and anticipate that more businesses and local authorities will wish to be involved in Primary Authority partnerships, as regulators seek to offer the benefits of consistent and cost-effective advice to a wider range of businesses.”

Director-general of the British Retail Consortium, Stephen Robertson, urged “swift action” to bring the reforms to life, adding: “Reputable retailers spend considerable resources in ensuring they observe – and go well beyond – the law. These proposals should help enforcers take the right approach to dealing with responsible businesses.”

IOSH also said it sympathised with the situation of many SMEs, but warned that those participating in the Primary Authority scheme must be committed to compliance. Dr Luise Vassie, IOSH executive director of policy, said: “We agree that because of the regulatory and non-regulatory demands that exist, there’s a cumulative burden on SMEs. Therefore, it’s important the Government addresses non-regulatory sources and clarifies actual legal requirements.

“Local Enterprise Partnerships can play a role in helping the extension of the Primary Authority approach. However, the Primary Authority must make sure its members are committed to compliance and the agreed standards.”
 

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