Source · Select Committees · Public Accounts Committee
Recommendation 14
14
We questioned Ofcom, the Environment Agency and the HSE on the extent to which they...
Conclusion
We questioned Ofcom, the Environment Agency and the HSE on the extent to which they are able to capture the cost of their regulations on their sectors. Ofcom told us it is stepping up its efforts to measure its impact since this committee’s 2019 report. But it also set out the challenges that regulators face in measuring costs and benefits when their focus is often on reducing risk, where it can be difficult to determine what would have happened if the regulator had not acted.27 The Environment Agency does not have a figure for the overall cost to industry of its regulation, but it has a goal to reduce costs year on year and when it makes significant changes to regulations it assesses the cost implications.28 The HSE is able to track the costs of some of its regulatory activity, in cases where costs are charged directly to business. However, more generally, employers have a duty under the Health and Safety at Work Act to ensure, as far as reasonably practicable, the health, safety and welfare at work of their employees. The HSE does not track the costs to businesses of meeting this duty. However, it contended that businesses benefit from ensuring a safe workplace (in terms of increased competitiveness and trust), and that this may outweigh the costs.29
Government Response
Not Addressed
HM Government
Not Addressed
4.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2021 4.2 This work is already underway and reforming the Business Impact Target to accurately capture the impacts of regulation is a fundamental part of the “Reforming the framework for better regulation” consultation, which was open to the public to provide responses from 22 July 2021 until 1 October 2021. 4.3 The current BIT framework allows for the financial impacts of regulation to be captured accurately. It does not lend itself, though, to capturing the wider impacts of regulation, such as its impact on innovation. The consultation therefore invites views on how to capture better the regulatory costs and benefits. The consultation provides four options with regard to the metric – adjust the current system, change it, replace it or remove it. The choice of metrics used (and which of the four options of adjust the current system, change it, replace it or remove it is chosen) will impact upon the ability to measure less clearly defined concepts such as innovation, competition, wellbeing, and security. 4.4 The government’s proposals to improve the analysis of regulatory costs and benefits will be set out in the consultation response. The response will also consider regulators’ role in the promotion of competition and innovation and whether to revise existing guidance and statutory objectives.