4th Report - Regulating for growth

HM Treasury will not know if the Action Plan has been successful, as it has not defined growth in any detail beyond an increase in GDP. We do not believe HM Treasury is clear on what success or failure of … Read more HM Treasury will not know if the Action Plan has been successful, as it has not defined growth in any detail beyond an increase in GDP. We do not believe HM Treasury is clear on what success or failure of the Action Plan looks like. HM Treasury defined growth as an increase in GDP but has not defined the intended timeframe or set any targets. DBT and HM Treasury failed to demonstrate how regulation contributes to key drivers of GDP growth in their evidence. They did not speak to drivers such as trade and investment, or the clear need to see productivity improvements in regulated entities. These omissions matter, since government needs to be clear on 3 what growth it is seeking to deliver and when. Without this, HM Treasury’s definition of growth amounts to an ambiguous objective rendering success impossible to measure. While short-term growth might mean cutting prices in some areas, longer-term growth could require price increases to encourage investment. Select committees can play a role in holding regulators accountable for shifting the dial on growth, but it is ultimately up to DBT and HM Treasury to implement robust accountability measures to ensure regulators’ work increases GDP. recommendation HM Treasury should establish a time horizon for growth targeted by the Action Plan, including supplementary indicators (such as investment, the costs associated with investment in different sectors, and productivity). This would establish if the Action Plan is influencing factors that increase GDP and by how much. Show less

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DBT and HM Treasury do not have a grasp on which regulatory interventions they should prioritise to achieve the administrative burden reduction target. We know from past interventions that a small number of measures account for a significant proportion of … Read more DBT and HM Treasury do not have a grasp on which regulatory interventions they should prioritise to achieve the administrative burden reduction target. We know from past interventions that a small number of measures account for a significant proportion of savings and costs to businesses. We are concerned that savings identified to date are much smaller than needs to be achieved. DBT alluded to the new Planning and Infrastructure and Corporate Reporting Bills. These are expected to 4 deliver £460 million in savings in total. This is clearly well below the £5.6 billion target, and could be offset by costs generated by other pieces of legislation. Departments will submit annual simplification plans identifying areas for improvement and DBT is supplementing this with engagement with businesses. However, a year on from the Action Plan’s launch the Unit is still waiting for these plans to be submitted. recommendation This Autumn the Unit should publish a table of the interventions each department will prioritise to achieve the annual administrative burden reduction target and the expected reduction. It should then update it annually. Show less

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It can be burdensome, complex and difficult for businesses to navigate and cooperate with multiple regulators across government. Businesses can face challenges when they must deal with multiple regulators due to gaps, overlapping jurisdictions and trade-offs in regulation. We heard that some departments are trialling a ‘lead regulator model’ in …

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HM Treasury and DBT do not have a robust plan to achieve the 25% reduction in the administrative burden. In the absence of individual targets for departments and regulators, the Unit relies on departmental annual simplification plans to monitor progress against the target. The Unit intends to publish analysis of …

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On the basis of a report by the Comptroller and Auditor General (C&AG), we took evidence from the Department for Business and Trade (DBT) and HM Treasury on the government’s efforts to ensure regulation supports growth.1

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Regulators must balance different objectives and duties when they exercise their functions. This means that they balance risks and manage the associated trade-offs. In practice, this may involve accepting a higher level of risk in some areas based on potential benefits in others. For example, a decision by financial regulators …

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We asked HM Treasury for examples where increased risk appetite could deliver growth but did not get a satisfactory answer.11 HM Treasury told us that macroeconomic stability is important for the Chancellor’s growth goals, which is self-evident, but did not link this back to regulation. It also explained that government …

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Having asked regulators to be less risk averse, a year after the Action Plan, neither DBT nor HM Treasury have articulated what level of risk appetite they expect regulators to work within. Without this, regulators cannot know what levels of risks government is willing to accept, and may be unable …

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The departments explained that the joint unit responsible for delivering the Action Plan relies on sponsor departments to communicate risk appetite and growth steers through strategic policy statements for the Action Plan’s 16 key regulators.15 DBT told us that work to ensure all 16 key regulators have steers is ongoing, …

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Growth can mean very different things depending on the timeframe applied. Short-term growth could involve reducing costs of certain goods and services to stimulate household spend, but long-term growth could mean high prices to budget for investments that are believed to improve productivity in the future. The written evidence submitted …

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We asked the departments what they meant by growth, and the intended timeframe, but they were not able to give us a satisfactory answer.22 DBT told us that growth was “growing GDP”, and HM Treasury said “growth is the GDP”, but did not specify what this meant or how much …

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Effective monitoring is key to ensuring the Action Plan is kept on track and impacts positively on businesses and economic growth.25 The departments have published regulators’ KPIs, but activity-based metrics such as processing times offer very limited insight into whether regulation is enabling growth.26 DBT told us it engages with …

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HM Treasury noted that regulators are rarely asked about their role in economic growth by parliamentary select committees.28 Only 8% of select committee sessions in the period January 2013 to December 2025 mentioned economic growth.29 Select committees can play an important role in holding regulators accountable, but parliamentary accountability does …

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It can be challenging for businesses to navigate the regulatory landscape. We received written evidence which highlighted how uncertainty adds to costs and delays for business through unpredictable timelines, unclear interpretations of rules, opaque enforcement thresholds, and uncertain priorities.30 In areas such as environmental regulation, businesses have to navigate between …

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HM Treasury told us that it considered simplification and streamlining of engagement to be “incredibly important” and cited examples of what government was doing to improve the experiences of businesses.33 The Cunliffe review instigated the ongoing creation of a new single water regulator and the Corry review recommended a “lead …

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A small number of regulatory interventions account for a disproportionately large proportion of costs and savings to business. The C&AG’s report found that, out of around 100 published impact assessments reviewed by the Regulatory Policy Committee since 2020, a quarter of regulations reporting an increase in cost to business accounted …

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The Action Plan committed to reduce the administrative burden on business by £5.6 billion (25% of the £22.4 billion annual baseline) by the end of parliament.40 Both departments said work to identify the largest savings was under way, and DBT has identified the potential in the Planning and Infrastructure, and …

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DBT is also working with businesses and departments to identify opportunities. It expects the picture to be clearer once it has reviewed the departments’ Annual Simplification Plans “in a few weeks’ time”.43 It is now over a year since the Action Plan was published.44 The government has until the end …

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The target is net of new regulatory costs, meaning that government counts savings remaining after it has subtracted cost increases arising from new legislation. If new bills are introduced that impose large costs on business this puts the target at risk. For example, the Employment Rights Bill is expected to …

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The 25% target is ambitious and cross-governmental but DBT could not confirm whether the programme was on track.46 In the progress update published October 2025 HM Treasury announced that it identified £1.5bn of administrative burden savings in October 2025, but this is a gross figure. DBT told us that it …

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The equivalent programme in 2025 was successful, but unlike this earlier initiative there are currently no individual targets set for departments and their regulators.48 DBT told us it did not consider individual targets would be necessary to identify whether departments were putting effort into the exercise.49 Instead, it expected to …

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For savings to be credible they need to be verified. Savings reported by departments under the Business Impact Reduction Programme (2015–2023) were scrutinised by the Regulatory Policy Committee (RPC).52 This independence is particularly important given the variable quality of analysis produced by government departments. According to RPC analysis published in …

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No independent review is planned. DBT told us that departments themselves will instead validate the claims through their Chief Economists. Despite a year having passed since the Action Plan’s publication this process has not started.54 52 C&AG’s report, The Business Impact Target: cutting the cost of regulation, Session 2016–17, HC …

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