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November 2, 2011

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No trade-off between protection and growth, minister tells regulators

Businesses taking on more regulatory responsibilities and enforcement authorities giving greater recognition to companies’ efforts to comply with the law are two of the tenets of the Government’s vision for a better regulatory environment, Business minister Mark Prisk said yesterday (1 November).

Addressing the Local & National Regulators annual conference, Mr Prisk called for a more mature relationship between business and regulators, as well as a more accountable and transparent system of local regulation.

Following on from Deputy Prime Minister Nick Clegg’s speech to small businesses last week, Mr Prisk highlighted the importance of regulation in creating economic growth, but insisted that a trade-off between protection and growth is not inevitable. Instead, he concentrated on proposals designed to build on the relationship between business and regulators, including:

  • more use of co-regulation – where business shares a degree of regulatory responsibility – for example, through industry bodies setting professional standards;
  • greater ‘earned recognition’ – where regulators recognise business activities that support compliance and reduce intervention;
  • creating Local Enterprise Partnerships (LEPs) – where businesses and regulators are brought together to improve the transparency and accountability of local regulation; and
  • clearer, more straightforward guidance – so that businesses, particularly SMEs, have greater access to clear guidance on what they need to do to comply.

The minister explained that when regulation becomes “heavy-handed, inefficient, prescriptive and risk-averse” it prevents businesses from growing and creating jobs. But, he added: “It is nonsense to say that there must be a trade-off between protection and growth. That is a simplistic way of looking at a complex issue.

“The challenge is to transform the regulatory landscape so that the system delivers essential protections while avoiding unnecessary interference in the day-to-day work of hard-working business people seeking to innovate and grow, and thereby delivering the jobs and wealth we need.”

Mr Prisk went on to praise the Local Better Regulation Office’s (LBRO) Primary Authority Scheme, which allows businesses spanning local-authority boundaries to nominate a particular authority under whose regulatory regime they will operate. He said he would like to see the Scheme extended to cover more businesses, more policy areas, and deliver more earned recognition for businesses.

Commenting on the minister’s speech, John Walker, national chair of the Federation of Small Businesses (FSB), said: “We know that a third of FSB members view regulation as the most significant obstacle faced by their businesses and that includes inspections too. The FSB has, for many years, called for a more cooperative inspection regime, where all inspectors understand the needs of small businesses, provide advice and support, work with them in a positive way to achieve compliance, and focus on real risks, not box-ticking.

“Guidance also needs to be clearer and more accessible for small firms and, when small businesses have a proven track record of good compliance and procedures, this should be taken into account by the inspector.”

In a separate development, a new Common Approach to Competency for regulators has been launched. The framework comprises a set of agreed core skills for regulators to acquire and develop, and is supported through Web-based resources for personal development planning.

Developed by the HSE, the Regulators’ Development Needs Analysis (RDNA) has been used within health and safety regulation for more than two years. In partnership with a coalition of local and national government regulators, including the HSE, the LBRO has now built on the Executive’s work and devised the Common Approach to Competency to be used across other local-authority regulatory services functions, such as trading standards and environmental health.  

Said Kevin Myers, deputy chief executive of the HSE: “Our experience shows that the RDNA approach provides more tailored and cost-effective learning and development for regulators, and an effective means to build and maintain relevant competence. This is, of course, good for them as individuals, good for the organisation, and, most importantly, good for the businesses they regulate and the people protected by it.”  

The LBRO, meanwhile, is to be replaced by a new organisation within the Department for Business. The new body will retain the LBRO’s independence and draw on its staff and expertise.

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