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Select committee inquiry

Better Regulation inquiry

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Public Accounts Committee · Opened 28 June 2016 · Closed 4 January 2018

Inquiry on parliament.uk ↗

What the inquiry looked at

“Limitations in the government's approach to reducing the cost of regulation mean the scope of the Business Impact Target is open to manipulation, and may not reflect a realistic business-centred view of regulatory costs, according to a report from the National Audit Office. The Business Impact Target aims to reduce the cost of regulation by £10 billion between 2015 and 2020. The Better Regulation Executive (BRE), a joint Department for Business, Innovation & Skills and Cabinet Office unit, is responsible for developing and implementing a framework for achieving the Target. The NAO's 2014 survey of business perceptions, published jointly with the Department for Business, Innovation and Skills, found that 51% of businesses saw the level of regulation in the UK as an obstacle to business success. National Audit Office report The National Audit Office report found that the government does not know how much cost businesses incur as a result of its existing regulations. This means that it cannot know how ambitious its target for reducing regulatory costs is. So far this Parliament, the £8.3 billion of expected regulatory costs imposed on business that are not included in the scope of the Target greatly exceed the £0.9 billion savings that are. According to the NAO, the Target does not and is not designed to reflect all administrative and regulatory costs to business, who also bear costs including tax administration, self-regulation and complying with EU regulation. There is no overall picture of how these costs affect businesses, making it difficult for the government to prioritise its efforts.”

The committee's words, from the inquiry page on parliament.uk ↗.

What it found

In the committee's words, from the summary of 18th Report - Better Regulation ↗

The Government has set a target to reduce the cost to business of regulation by £10 billion between 2015 and 2020. So far it has achieved less than £1 billion and this is almost entirely down to it counting the mandatory 5p plastic bag charge as a ‘saving’ for retailers because of the additional revenue it brings them. The credibility of the Government’s target is undermined by the exclusion of significant costs to business arising from new regulations; the National Living Wage is one of a number of individual regulations that are excluded and which, in total, are expected to add costs to business of £8.3 billion by the end of this Parliament, far outweighing the reported ‘savings’.

Departments do not know the cost to businesses of their existing regulations, making it difficult for the Government to know where to prioritise its efforts to reduce business costs. The focus on reducing business costs also means that departments are not consistently giving adequate consideration to the wider societal costs and benefits of particular regulations, for example where they impact on the environment, consumers or employees. Departments also need to do more to monitor and evaluate the impacts of their regulatory decisions, both to see whether regulations are working as intended and to learn lessons to inform future regulatory decisions.

What the government said

No government response is linked to this report.

Read the report ↗ Report an error

How the inquiry ran

Each dot is a dated item listed on this page, from the inquiry's opening on 28 June 2016 to 14 March 2018.

  1. Oral evidence 13 Jul 2016
  2. Report 12 Oct 2016
  3. Correspondence 2 letters

What it recommended

The committee's recommendations are not listed here yet. Read them in 18th Report - Better Regulation ↗ on parliament.uk.

Evidence

Oral evidence sessions 1

Correspondence 2 letters