Executive Summary,
Interim Report, Dec 2004

1.	The review has looked at administrative burdens in detail over the last eight months. The review has not found that the regulatory enforcement system, or any part of it, is irretrievably broken, or mistaken in its original conception. The solutions the review proposes are designed to modernise inspection and enforcement across the system, making a decisive break from the specialised, isolated inspectorates of the past.
2.	It is important for Government to tackle the administrative costs of regulation – the costs imposed by the enforcement activities of regulators through form-filling, inspection or other action. In one recent survey of small businesses, more than half said that inspection and paperwork were the biggest difficulties regulation caused them.1 Moreover, the burden of administrative costs falls most heavily on the smallest businesses. The recent Enterprise survey of the Institute of Chartered Accountants in England and Wales suggested that 69 per cent of the overall regulatory burden (not only administrative costs) fell on micro businesses – businesses with fewer than 10 employees.2
3.	Many of the review’s recommendations are a continuation of existing trends. The Health and Safety Executive and the Environment Agency have published strategy documents based around risk assessments. The Food Standards Agency recently reissued its statutory Code of Practice, to allow more flexible enforcement in lower-risk food premises. Work on tackling administrative burdens needs to build on these foundations.
4.	On many measures of regulation and the impact of inspection regimes, the UK compares well with other OECD economies. However, the review believes the time is right for the Government to build on its leading position, and move towards treating regulatory enforcement as a system in itself – a system that needs managing separately from the differing policy concerns of, for example, health, food safety, or the environment.
5.	The review has considered all aspects of administrative costs on business, and particularly those imposed by form-filling requirements, inspection regimes, and penalties. On form-filling, the review thinks that regulators need to put robust mechanisms in place to prevent excessive or duplicated information requests. At the same time, sharing of data and common databases should be used to reduce regulators' need for information. The review makes some specific recommendations, but will be working with regulators in the next stage of its study to identify where scope for greater collaboration exists.
6.	The review thinks that the inspection resources of regulators should be directed at the places where they can do most good. The best way for this to happen is through a robust, open and tested system of risk assessment, which takes all relevant information into account. This enables inspection resources to be concentrated on the most risky businesses. At the same time, advice and support for smaller and less risky businesses needs to be enhanced, and regulatory guidance made simpler, to improve compliance outside the inspection programme.
7.	On penalties, the review has heard both from regulators and businesses that the penalty regime is cumbersome and inefficient. In the second phase of our work, the review will be considering a number of options for strengthening the penalty regime, ensuring both that regulators are able to act swiftly to counter illegal activity, and that businesses are not put at a competitive disadvantage by the operations of rogue traders.
8.	The proposed solutions, suggested by the review, are set out for consultation in Chapter 4. They include proposals to: • ensure general use of robust risk assessment methodologies to programme inspections so that no inspection takes place without a reason; • rebalance advice and inspection, because good advice leads to better regulatory outcomes, especially for small businesses; • better tailor advice for businesses; • simplify the forms that businesses have to fill in, using business reference groups and common reporting frameworks; • reduce the number of forms that businesses have to fill in, by encouraging greater sharing of data, and eliminating duplicate information requests; • make incentives for compliance more effective; • strengthen the penalty regime, and make action against rogue businesses quicker and more effective; • improve joint working including information sharing and cross-training between regulators; and • continue the recent trend of consolidating regulatory functions into national regulators.
9.	The solutions proposed are not designed to transform the regulatory system overnight, but to bring into it principles of management and structure that will drive the system towards efficiency and responsiveness delivering excellent results in co-operation with businesses.
10.	The proposed solutions are not final recommendations. The review also identifies four areas for further work: form filling, structural reform of national regulators, local consistency, and the penalty regime. The review is keen to hear the views of businesses, the public and regulators on all the areas discussed in this report. The address to send consultation responses is in Chapter 5.

To download full report, click here (PDF)