UK Government launches consultation on limiting the cost of new regulationsBy: Maria Carim [Last modified: 12/08/2008 14:32:39]
Proposals to limit the cost of new regulation were unveiled last week as the UK Government invited views on a system of regulatory budgets for government departments - which would be a world first. The proposals are designed to improve the thinking of Government, along with business and the third sector, in planning and implementing regulation more efficiently. They include:
* creating a rolling limit on the costs of new regulation that could be introduced for each government department
* setting initial budgets to be introduced in 2009
* allowing departments to offset the cost of new regulation with savings made by reducing the existing regulatory burden and trading with other departments
Secretary of State for Business, John Hutton, said:
"Good regulation should drive competition and boost our productivity. But too many new rules can stifle enterprise and blunt our competitive edge. If the UK is to remain a respected place to do business, we must not expect business simply to absorb the costs of a stream of new Government initiatives. The introduction of a regulatory budget for every department will focus new regulations on the real priorities and act as a powerful incentive for departments to cut or streamline existing burdens. This innovative approach will build on efforts already in place to cut the burden to business by 25 per cent by 2010."
Under these proposals, budgets would be set and agreed later this year, departments would be monitored through impact assessment reports that require them to explain and fully cost the impact of new regulation. Close monitoring, by the Better Regulation Executive, will help departments avoid going over budget, but Parliament will hold to account any that exceed their limit.
The consultation also seeks views on managing the costs of new climate change regulation outside a system of regulatory budgets, given the complexity and cross-departmental nature of the efforts, and on how independent regulators should be included in the system.
The consultation document below explains the background to regulatory budgets and discusses how it could work in practice. The formal consultation process runs from Wednesday 6 August to Wednesday 12 November 2008.
Regulatory Budgets: A Consultation Document