Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 60 - 79)



  60. Does it sound ridiculous to you? I am not saying the NAO are incorrect, but does it sound a ridiculous thing to you that a shopkeeper in a small shop should spend five days out of a month dealing with government admin rather than trying to keep the shop afloat?
  (Mavis McDonald) There are areas where the public will be legitimately concerned about the way a village shopkeeper might handle the goods he supplies, particularly in terms of fresh food. The precise balance for anyone may vary depending on what they are doing. I would go back to what David said. Some of this would possibly be down to the way in which the local authority trading standards department was enforcing some of their regulations in that particular area. If there is scope for looking at the way in which the actual implementation of existing regulations is done, that may well be the most fruitful area for helping small businesses.

  61. When you said you were actually engaged with departments in this business of looking for significant opportunities to strip out regulation, what should an average shopkeeper expect in shall we say five years' time that they will be having to spend, perhaps even in three years' time, in terms of days per month compared with now?
  (Mavis McDonald) I really do not have an answer to that question.

  62. You do see that if you are a shopkeeper it is a matter of huge concern?
  (Mavis McDonald) Where we might help the average shopkeeper, beside looking at the way in which we handle what is now on the table, is to look at the way in which we ask for information, the way in which we might consolidate the way in which we ask for information. For example, something we are looking at now in relation to government's relationship with the voluntary sector, a lot of the burden of the impact is because government is duplicating the way in which it asks for information before it provides grants, for example, or is looking for several different kinds of registration where one kind of registration might do. There is a number of opportunities to look at that kind of way in which systems are administered which could be very helpful to the small shopkeeper as well as looking at pale blue skies as to what is coming over the horizon, which is much more difficult to do.

  63. The NAO talked about these three points: starting earlier, consulting effectively and then analysing the costs and benefits appropriately. May I start with starting earlier and go back to Mr Gardiner's question about Europe? I had been eagerly expecting you, in answer to his question about paragraph 2.6, to say yes and I was quite surprised when you said no. I take it then that since the Cabinet Office guidance was issued, other than things which are a long way down the pipeline, for new legislative initiatives which have been started since the Cabinet Office guidance was issued in 1999, it is now standard practice that an RIA should be considered at an earlier stage.
  (Mavis McDonald) We have certainly been encouraging that and it is something our Ministers attach a lot of importance to. We recently held a conference with departments about arrangements for transposition for example, to stress again the kind of need to think early about what you would do —

  64. I am talking about earlier than transposition. I spent a week I shall not forget in Directorate General XV when I was a journalist writing about single market and financial services regulation. I remember well talking to a lawyer who is a lobbyist and talked to the Commission a great deal about proposals for directives. I remember he said to me very clearly that once a directive had emerged from the Commission even in draft form it is way, way too late in the process, very often—not always but often—to do much about it because there are far too many egos involved. What I am asking is not once you have a directive which has been agreed and has to be transposed, I am talking about much, much earlier in the process.
  (Mavis McDonald) The conference was encouraging that kind of early engagement as well and it is something we promote in the regular contacts we have with departments who are engaged with Europe. The other thing we have been doing is working within Europe to try to get our principles and the approach we have adopted here to regulation, including the three principles you are exploring, taken on board as part of Europe's own thinking about the way in which the impact of European regulation should be managed and monitored and that is currently ongoing work.

  65. Mr Gardiner earlier mentioned the European Policy Forum's letter to us. They say, " . . . although last year we negotiated a change to the RIA guidelines under which Departments are advised to consult affected parties at the outset on the most appropriate data collection and impact assessment methodology, we have not yet heard of a case where this has happened". Could you say why not?
  (Mavis McDonald) I am not sure that we recognise exactly what they are saying.

  66. Do you think it has happened?
  (Mavis McDonald) This is part of an ongoing process. We do think departments have got engaged much earlier on quite a lot of activity which is going on in Europe and our current guidance already draws attention to this. We are certainly quite happy to provide more and better examples.

  67. May I be clear on one thing? Am I right in thinking that EPF have represented this accurately, that your guidance now, following the change they negotiated, does include advice to departments to consult affected parties at the outset on the most appropriate data collection?
  (Mavis McDonald) The current guidance certainly includes that. I am not quite sure we recognise that cause and effect.

  68. Perhaps the simplest way round this is if you give me an example. If they say it has not happened, can you give me an example of where it has happened?
  (Mavis McDonald) No. I am consolidating a note on European issues and if I could add that into that, then we shall give you as long a story as we can, if that is okay.

  Mr Bacon: Very much so.


  69. You will have this letter which is being referred to. It is an important letter and I think they would welcome your remarks on it in detail.
  (Mavis McDonald) Yes.[5]

Mr Bacon

  70. They also make the point that "RIAs should be based on full commercial impacts, including employment and consumer prices, rather than just compliance costs, which are often interpreted narrowly. However, in many of the RIAs we have examined the assessment is still confined to costs of compliance". What would be your reaction to that?
  (Mavis McDonald) Our view is that the fullest assessment of costs that anybody is able to do is of great value and we would not want to inhibit people from doing that if they were able to do that. It is something we can take up again and look at when we revise the guidance.

  71. I should like to ask you about asymmetry. This is a point the EPF make but it is also made in the report on page 17, paragraph 1.16, "Cabinet Office guidance suggests that it may be good practice for a RIA to be prepared where regulatory action is taken which does not need legislation". The EPF go on to make the point that there is quite an asymmetry " . . . between ministries and regulatory bodies and some regulatory bodies, like the Environment Agency and the FSA where they do have a statutory requirement, but others which do not. Yet there are regulatory bodies which do have effectively the power to make a considerable difference ... although they do not make regulation in the strict sense, the impact of their regulatory decisions is often far greater than that of the legislation from which they derive their powers". Would it not be sensible to have RIAs everywhere where people were going to be seriously impacted by them?
  (Mavis McDonald) We do suggest that when departments are developing policy they do think about whether they need to adopt this approach even if they are not particularly proposing to go for a legislative change at that point. Needless to say we do not necessarily have knowledge about what all departments are doing but it is something we can give more attention to when we look at revising the guidance.

  72. The report talks about not just businesses but charities and voluntary sector organisations being affected by regulation. What have you been attempting to do to try to improve the situation for charities and voluntary organisations?
  (Mavis McDonald) Our approach was very much, as it is with small businesses, finding the appropriate and best way to consult with the kind of charities and voluntary sector bodies which are impacted. Unlike business, voluntary sector bodies scale from very large national organisations which are well able to cope, to quite small local groups which have much less resource to handle this. We would expect to find best practice examples to promote. There is also a cross-cutting review as part of the spending review 2002 which is looking at service delivery near the voluntary sector and which is working across government to look amongst other things at the ways in which we can, as government, help engage with the voluntary sector by reducing the impact of government requirements on them if they are going to participate as service deliverers and receive funding. That is another route. The Home Office active communities unit have been working with the national council on revising their compact on how government might deal with voluntary bodies more generally to try to ease the weight of administration required of them.

  73. Paragraph 1.16 says, "RIAs are not expected where the proposal affects only the public sector, such as schools and police forces". Am I right that the general rule is that if it is a public sector body then an RIA is not required?
  (Mavis McDonald) Yes.

  74. I just wanted to check that. Earlier in part 1 in paragraph 1.5 it is talking about businesses and it says that in small organisations "the proprietor has to give up valuable time not only to read and understand the regulations but also to work out what it means for the business". In paragraph 1.6 "The report noted that while large companies could employ experts in each of these fields, it was not reasonable to expect the same level of expertise in one person". It strikes me that all of that could apply to a small school and yet schools and indeed police forces do not benefit, if that is the word, from RIAs. Is this the reason why we get so many complaints from schools and indeed police forces about the burden of regulatory and administrative change?
  (Mavis McDonald) The formal RIA system does not apply. We have a unit within the regulatory impact unit which is looking at the impact of regulation on the public sector itself. We have worked with departments on cutting frontline bureaucracy, with schools, with the police and with GPs. We have some more work going on with GPs, we have some work going on with local government and we have a real programme there. Those reports are in the public domain.

  75. Are they out already?
  (Mavis McDonald) Yes.

  76. Do they give any indication, or if not is there work going on, as to how much time teachers do not spend in front of their classes or how much time policemen do not spend out catching criminals because of the burden of regulation?
  (Mavis McDonald) We can certainly send the Committee copies of the reports. Largely what they focus on is the scope for reducing requirements on frontline staff in terms of paperwork which would actually release them to have more hours to work on their core activities. Those opportunities are spelled out in those reports.[6]

  77. Paragraph 3.45 and onwards talk about access to RIAs on websites and paint a picture of quite wide access but nonetheless quite a lot of variation. Could you say what percentage of RIAs are now available through the internet?
  (Mavis McDonald) No, I cannot tell you precisely what percentage of RIAs are out there.

  78. It is not all of them.
  (Mavis McDonald) It is not all of them but it is now a very significant number of them. We have been developing our own website, indeed I have just been given a front page. We are aiming to get to the position where you can cross click; we list but then you can get from our website into the detail of the department's RIA as well. We are much better than we were on that.

  79. Is it your target that all RIAs will be available on the web?
  (Mavis McDonald) Yes.

5   Ev, Appendix 1, p 23. Back

6   Making a Difference Reducing School Paperwork, Making a Difference Reducing Police Paperwork and Making a Difference Reducing General Practitioner(GP) Paperwork-reports from the Cabinet Office, Public Sector Team, Regulatory Impact Unit. Back

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