Former Cabinet Secretary Mark Sedwill is leading a campaign to overhaul the UK’s regulatory regime to seize the freedoms offered by Brexit and reduce the burdens on public sector workers and businesses.
Lord Sedwill, who stepped down as the country’s top civil servant and national security adviser in 2020, said since the UK left the European Union and took over the regulator, he has largely maintained the system inherited from the EU.
“Now is the time to act, not to set fire to all regulations,” he said. “Smart and agile regulation must be part of Britain’s post-Brexit competitive advantage, while maintaining the economic, social and environmental standards demanded by our citizens.”
Sedwill said these standards are also at the heart of modern free trade agreements, including new free trade areas encompassing some of the fastest growing economies in the world, with which Britain wants to trade.
The former taxi secretary has spent the past few months chairing a panel of experts advising the Policy Exchange think tank as part of its Reengineering settlement project. His comments are included in the foreword to his reform plan which has just been published.
Sedwill said it’s “clear” that existing regulatory regimes often create risk aversion and bureaucracy for both regulators and regulatees. He said some regulators have “the magisterial authority” to intervene across sectors while others share a cluttered space with their counterparts and “struggle to respond to change”.
“The UK’s regulatory regime is not as catchy a topic as debates over taxes, spending and interest rates, but getting it right is essential to Britain’s long-term economic growth. Britain in the post-Brexit world,” he said.
“Britain needs fewer authoritative regulators with clear mandates from government and accountable to parliament to promote health as much as to ensure the hygiene of their sectors, judged on impact not process . The performance of regulators should also be subject to regular independent review by the National Audit Office.
Sedwill called on the government and parliament to seize the opportunity to both streamline and modernize regulation to deliver the high environmental and social standards citizens want and “the competitive advantage that the post-Brexit economy required”.
The Policy Exchange report says attempts by successive governments to reduce bureaucracy and the number of regulatory quangos show a “constant tension” between the impulse to regulate and the recognition that regulation imposes costs on organizations and limits the freedom of people.
He added that departments only conduct post-implementation reviews on between 25% and 40% of regulations that should be reviewed, and said that if the government wishes to use such tools to promote better regulation, it must hold departments and regulators to account. In doing so.
“The center needs more grip”
Among the report’s recommendations is a call for the center of government to have a “greater grip” on regulatory policy. He said that over time, the institutional responsibility for intergovernmental regulatory policy has shifted from the center of government to the business department.
“It should be sent back to the center of government to increase coordination, prioritize areas for reform and hold ministries accountable for the costs and benefits of regulation,” the report said.
Policy Exchange calls for the creation of a new regulatory reform unit within the Cabinet Office and the appointment of a dedicated minister for regulatory reform.
According to the proposals, the new unit would ‘consolidate and merge’ the functions of the Cabinet Office’s existing Brexit Opportunities Unit and the Better Regulation Unit, which currently sits within the Department for Business, Energy and Industrial Strategy.
The report states that the new unit will strengthen intergovernmental oversight and should also be responsible for developing the Better Regulation framework, conducting periodic reviews of the role and performance of regulators and developing long-term government regulatory priorities.
Elsewhere, the report says there should be a “presumption against the creation of new regulators and that the government should ‘explore possibilities of consolidating the number of regulators in a given sector’. It said fewer regulators and greater in key areas would allow for greater democratic accountability for regulatory outcomes, both in terms of public protection and cost.
He said the UK’s multiple financial regulators could be a “major barrier” to innovation and new market entrants lacking the resources of large, established firms. He added that the NHS in England is overseen by 10 different service regulators and eight different health professions regulators.
“The overlapping of functions simultaneously increases the regulatory burden on the NHS, creates the potential for conflicting demands that need to be reconciled, and risks individual regulators avoiding responsibility for the consequences of regulatory failures,” the report said.
“Consolidating the number of regulators in individual sectors would subject the heads of those regulators to increased scrutiny and accountability.”
But the report adds: “Consolidation should not come at the expense of consistency and consistency in regulators’ missions and objectives.”
Policy Exchange said MPs on parliament’s public accounts committee should be tasked with conducting democratic scrutiny of government regulatory policy and the performance of regulators – or that a new committee to perform this function could be created.
The report also says the government should require regulators to cooperate and create a legal obligation for them to report on how they comply with this requirement, which would be verified by the National Audit Office.
The report can be read here.