Think tank calls on government to tame the regulators, and focus on outcomes

Government should “tame” the rise of regulators, and promote outcomes-based regulation, according to think tank, Policy Exchange.

The call to in a report, Re-engineering regulation: a blueprint for reform, was fleshed out by Policy Exchange in recommendations summarised here for regulation across all sectors.

More democratic oversight

“Government cannot and should not abdicate responsibility for setting strategic priorities or making difficult political choices. The fundamental principle should be that democratic politics should decide the ends, while regulators, subject to accountability mechanisms, are given the tools and provide the means for achieving those ends.”

Specifically the report advocated government and Parliament should set out clear statutory objectives and duties for regulators including how these should be prioritised, and make greater use of powers to issue strategic guidance to regulators as well as provide regulators with a formal mechanism for requesting strategic guidance from ministers when they feel their statutory objectives are in conflict.

More accountability

Regulators should be regularly audited against the objectives set for them by Government and Parliament and should be held accountable for the hygiene and health of their sectors. The National Audit Office should be empowered and resourced to conduct and publish regular audits of regulators’ performance, including industry and consumer outcomes for their sector.

Greater central and cross sector coordination

Institutional responsibility for regulatory policy should go back to the centre of government from the business department, to increase coordination, prioritise areas for reform, and hold departments to account for regulatory costs and benefits. Government should establish a new Regulatory Reform Unit within the Cabinet Office and appoint a dedicated minister for regulatory reform. Fewer, bigger regulators in key areas would enable greater democratic accountability for regulatory outcomes, both regarding the protection of the public and the cost of regulation.

Less regulation

Policymakers should always consider alternatives to statutory regulation, such as education and information, self-regulation, for example through codes of conduct, standards or accreditation, and co-regulation, and explain why these tools would not meet the policy objective.

Outcomes-based regulation

Government and Parliament should encourage and challenge regulators to explore how outcomes-based, collaborative approaches to delivering their regulatory objectives would improve outcomes for the beneficiaries of regulation and improve regulatory efficiency.

Policy Exchange listed a number of factors necessitating regulatory reform. These included Brexit, the need to adapt to technology and digitisation, and new policy challenges such as climate change.

It argued: “The response to new policy challenges such as climate change, increasing the resilience of national infrastructure, and rapid technological advances means arm’s length regulators are increasingly weighing political trade-offs. These trade-offs have distributional consequences for different producers and providers and their consumers and between generations – choices that should be made by democratically elected politicians.”