Source · Select Committees · Public Accounts Committee
Recommendation 10
10
Accepted
The regulators have since been asked (along with the rest of government) to model headcount...
Recommendation
The regulators have since been asked (along with the rest of government) to model headcount reductions of 20%, 30% and 40%, which would have significant impacts on these plans. In HSE’s case, it explained that if the reductions are modelled on its existing headcount, the cuts will include all planned growth in addition to 20–40% reductions. It told us that reductions in headcount would mean it was not resourced to take on its new functions and maintain existing ones.26 We questioned FSA on how 20% cuts in veterinarians would impact on it, and it told us that it would have a significant impact on the meat industry which, under current regulations, cannot place meat on the market in the UK or export it without veterinary oversight. It explained that current regulations prescribe the role of veterinarians in meat hygiene controls and changes would not be possible without a change in the law.27 20 Qq 10, 27, 29 21 Qq 12–13 22 Q 14, C&AG’s Report, para 4.11 23 Q 3 24 Qq 42–44 25 Qq 42, 48 26 Qq 8, 48 27 Q 11 Regulating after EU Exit 11 2 Regulatory divergence and international cooperation EU data sharing and cooperation
Government Response Summary
The FSA's budget will be maintained at the level agreed at Spending Review 2021, until March 2025, though will need to absorb inflationary pressures. HSE will continue to prioritize its resources on the strategic objectives set out in the HSE strategy 2022-32.
Government Response
Accepted
HM Government
Accepted
3. PAC conclusion: Potential large-scale reductions in staffing levels in regulators will not be achieved without fundamental changes in regulatory approaches. 3. PAC recommendation: The regulators and policy departments should identify the impact of potential cuts on regulatory risk and set out where significant changes in the regulatory model would be needed to balance the two. FSA Response 3.1 The FSA agrees with the Committee’s recommendation. Recommendation implemented 3.2 The Committee should note that, since the hearing, it has been confirmed that the FSA’s budget will be maintained at the level agreed at Spending Review 2021, until March 2025, though will need to absorb inflationary pressures. 3.3 The FSA will continue to prioritise its resources to maintain its regulatory framework and to secure the most appropriate staffing levels it can with the funding envelope available. A prioritisation exercise has just been carried out in response to new work pressures which have arisen during this year (including the need to review food and feed law in preparation for implementation of the Retained EU Law Bill) which has resulted in changes to the FSA’s work programme. 3.4 Although the Civil Service 2025 commission has now been withdrawn, the current fiscal position means that, in the medium-term, the FSA may still face financial pressures in the current spending review period from inflation, as well as during the next one. It will continue to ensure that public health is protected, food is safe and is what it says it is and will continue to deliver a high quality and internationally respected regulatory model. CMA Response 3.5 The CMA agrees with the Committee’s recommendation. Target implementation date: April 2023 3.6 As highlighted in the evidence given to the Committee by the CMA’s Executive Director for Enforcement (and a CMA Board member), the CMA has modelled the impact of various levels of cuts in civil service numbers (or in funding), in response to a request from the government earlier this year. The CMA will continue to work closely with BEIS and HM Treasury to model and advise on how different funding scenarios might affect its functions as and where required. 3.7 Accordingly, it may be appropriate for the CMA to address this issue when it reports to the Committee in six months’ time, to provide an update. HSE Response 3.8 The HSE agrees with the Committee’s recommendation. Recommendation implemented 3.9 HSE will continue to prioritise its resources on the strategic objectives set out in the HSE strategy 2022-32 ‘Protecting People and Places’, and to work with the Department for Work and Pensions (DWP) and DEFRA to secure the best staffing levels it can. 3.10 HSE has no immediate plans to fundamentally change its regulatory approach, evidenced by continuing to fill new posts in its Chemicals Regulation Division. Should the approach change in the future, HSE’s focus will always be on securing the right regulatory outcomes to protect people and places. 3.11 In addition, HSE is fully engaged on work to support the government’s preparations for The Retained EU Law (Revocation and Reform) Bill 2022. This work will include a review of chemicals regulation regimes over the longer term and will ensure that HSE can identify regulatory efficiencies while maintaining human and environmental protection.