UK should follow Australian model to get better regulation

In a paper published today by the Social Market Foundation think tank, Stephen Gibson, Senior Fellow at Harvard’s School of Business and Government and Chair of the government’s Regulatory Policy Committee, which scrutinises regulation on behalf of the government – details lessons for the UK from other countries. Overall, he finds that the process for assessing whether regulations are working as intended is more regular and robust in Australia, US and the EU. By contrast, the UK often fails to review regulations and runs the risk of regulations not achieving their objectives and/or imposing unnecessarily high costs on consumers and businesses.

The UK’s regulatory evaluation mechanisms are not at all robust. Despite it being a statutory requirement to evaluate the effectiveness of a regulation within five years of its introduction, the National Audit Office identified a backlog of 63 post-implementation reviews (PIRs) in one government department alone. Another report from the Office for Environmental Protection found that 82% of environmental regulations did not have a published PIR. However, there is no consequence for ignoring the statutory requirement to undertake PIRs, and in many cases strong political incentives not to review previous policies, for example to avoid exposing past mistakes.

In contrast, in Australia the high priority placed on regulatory reviews by their Prime Minister means that nearly 100% of required PIRs are completed on time – Australian ministers and departments know that if they are late in completing their review, they will be ‘named and shamed’.

The paper recommends a number of changes that could lead to better evaluation of regulation in the UK, several of which are inspired by the Australian and EU approaches:

• Introduce sanctions for ministers and departments who fail to complete PIRs.
• Evaluate First – require all relevant existing regulations to be reviewed before any new regulations are proposed.
• Automatically ‘sunset’ (i.e. revoke) any regulation that has not had a PIR within a specified time (e.g. 5 years).
• Establish an independent third-party body to undertake the evaluation.
• Have a senior political ‘champion’ for evaluation, who is responsible for ensuring that PIRs are undertaken on time.

Stephen Gibson, Senior Fellow at Havard Kennedy School, Chair of the Regulatory Policy Committee and lead author of the report, said:

“Governments don’t always get it right, but they can learn from their mistakes and attempt to correct them. If the UK continues to review less than 4 out of every 10 regulations, we will be stuck with regulations that impose unnecessarily high costs, lead to unintended consequences, fail to achieve their objectives and simply fail to work.

This is not rocket science, many other jurisdictions are doing a far better job than the UK – but it does require high-level political support – without this, statutory requirements will be ignored, internal voices disregarded and pragmatic short-term pressures will continue to trump the longer-term benefits of a comprehensive approach to policy evaluation.”

John Penrose MP, author of a government-commissioned review of competition policy that reviewed regulatory burdens said in a Foreword to the report:

“If Governments can’t move faster and more nimbly, they will get left behind. If they don’t – or won’t – face their mistakes, learn from them and fix problems quickly, public services will start to look expensively old-fashioned or low-quality compared to everything else in normal life. It’s vital we fix the problem before those gaps get too big, otherwise citizens will lose faith in what the public sector is doing for them, creating opportunities for populists and extremists to exploit.”

Notes

1. The SMF paper will be published at https://www.smf.co.uk/publications/evaluation-of-regulations/ on Tuesday 12th December, at 5 AM.

Contact

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ENDS