The Hampton Review

1
The Hampton Review

• March 2007

2
Background

• Business made a series of high level complaints
  about poor co-ordination and multiple inspections
• Chancellor commissioned the review at Budget 2004
• It was the first time that Gov had looked
  systematically at the administration cost of
  regulation including
• inspections
• form filling
• coordination between different inspectorates
• Remit to streamline administration costs, without
  reducing outcomes
• Interim report at PBR 2004 final report at
  Budget 2005
• Complemented by Less is more, David Arculus which
  triggered admin burdens measurement exercise.

3
The facts the regulatory sector

• 63 national regulators of varying size, from 1
  inspector to almost 2,500.
• 468 local authorities, both counties and
  districts, with 4,500 trading standards staff and
  15,300 environmental health staff
• 1¼m inspections by national bodies, 2½m by local
  authorities each year
• Total spend of national regulators 3.1bn
• Total spend in local authorities 0.9bn

4
What businesses think

• Lack of joining up
• 74 of businesses said that the inspections they
  received were not co-ordinated
• 60 of businesses had overlapping information
  requests from different regulators
• 70 had received conflicting advice (Hampton
  survey)
• Inspectorate landscape is too confusing
• 50 of small businesses looking for advice cannot
  find it (SBRT)
• A serious worry for small businesses
• top cause of worry for small business owners,
  ahead of increasing customer demands and lack of
  time for friends and family (Grant Thornton)

5
Examples

• The HSE told a business to move storage of a
  particular chemical away from the main factory
  building to prevent accidents, and the
  Environment Agency then told them to move it
  back, to prevent contamination of waterways in
  the event of an accident
• John Lewis has been told to change the way it
  prices perfume three times in two years, although
  the regulations have not changed
• One major GSK pharmaceutical plant has received
  only one random visit from HSE in the last 5
  years, plus two in response to accidents. The
  Food Standards Agency, however, inspects the
  canteen every six months without fail, even
  though no problems have ever been reported.

6
What the review has found

• Administration costs are a considerable burden,
  but hard to quantify
• The major components of the administrative burden
  are
• Form filling there are too many forms, they are
  too long, they are too hard to navigate and there
  is too much duplication
• Inspection which are too often uncoordinated and
  untargeted. Inspection activity has gone up, but
  regulatory outcomes have not improved
• The burden falls most heavily on small business
  (69 of administrative burdens fall on companies
  with fewer than 50 employees ICAEW)

7
Recommendations

• Hampton recommends a balanced package
• Common principles for all regulators to follow
• Consolidation of regulators to
• provide joined-up services. Most businesses
  should only have deal with 1 or 2 regulators
• 31 regulators into 7 thematic bodies by 2009
• Improve management and accountability of
  regulators and their ability to prioritise
• Less form-filling
• Business reference group to vet all forms before
  introduction
• (In time) common ICT platforms to allow data
  sharing
• Make enforcement more effective
• Quicker penalties through administrative fines
• Higher fines for persistent offenders
• Standards for appeal procedures

8
Common principles enforcement

• Regulators, and the regulatory system as a whole,
  should use comprehensive risk assessment to
  concentrate resources on the areas that need them
  most
• Regulators should be accountable for the
  efficiency and effectiveness of their activities,
  while remaining independent in the decisions they
  take
• No inspection should take place without a reason
• Businesses should not have to give unnecessary
  information, nor give the same piece of
  information twice
• The few businesses that persistently break
  regulations should be identified quickly, and
  face proportionate and meaningful sanctions
• Regulators should provide authoritative,
  accessible advice easily and cheaply and
• Regulators should recognise that a key element of
  their activity will be to allow, or even
  encourage, economic progress and only to
  intervene when there is a clear case for
  protection.

9
Common principles policy

• All regulations should be written so that they
  are easily understood, easily implemented, and
  easily enforced, and all interested parties
  should be consulted when they are being drafted
• When new policies are being developed, explicit
  consideration should be given to how they can be
  enforced using existing systems and data to
  minimise the administrative burden imposed and
• Regulators should be of the right size and scope,
  and no new regulator should be created where an
  existing one can do the work.

10
Key outcomes

• Principles of enforcement enshrined in law
• Better accountability for regulators
• Reduction in form filling through fewer, simpler
  forms
• End of routine inspections
• Penalties reform for tougher, quicker penalties
  for persistent offenders
• Businesses better able to understand requirements
• Structural reform of national regulators
• Greater co-ordination of local authorities work