Local Better Regulation Office (Dissolution and Transfer of Functions, Etc.) Order 2012

Lord Young of Norwood Green Excerpts

Monday 16th January 2012 Grand Committee

A full impact assessment has been completed and there are no new burdens on business as a result of this order. Stakeholders prize the work of the Local Better Regulation Office. The changes enabled under this order will see the new Better Regulation Delivery Office build upon its work to date to continue to reap benefits for businesses. By ensuring consistency and continual improvement in the regulatory landscape we can strive to provide an even stronger, more supportive environment in which our businesses can strengthen and grow for the benefit of our whole economy, while still providing necessary protection for citizens and communities. I therefore commend this order to the Committee.

[Lord Young of Norwood Green]

I thank the Minister for her comprehensive statement. In the beginning she said that there would be greater transparency and accountability. I noticed the assertion but I am not sure that I necessarily saw the evidence of that. This is an interesting NDPB and the impact assessment or the review showed that it was one that was highly regarded, which I think is important. When the Minister talks about greater transparency and accountability in a body that is being absorbed into BIS, I think we are entitled to some validation of that statement.

The Minister also said that the primary authority scheme will continue. However, paragraph 8.5 of the Explanatory Memorandum states:

“In line with the conclusions of the BIS led (public bodies) review of LBRO, the power to direct local authorities, and the power to enforce service improvement will be stopped. However, the power to issue guidance to local authorities will be retained, as will the requirement that local authorities must have regard to that guidance”.

Therefore, while I hesitate to use the word “disingenuous”, I think that the Minister did not give quite the whole story when she said that the primary authority scheme will continue. The primary authority scheme will not continue in its present form; it will be modified. Instead of there being a power to enforce, there will simply be guidance issued to local authorities. Given that that aspect of the operation of the LBRO was highly regarded, that is a not unimportant issue that requires some clarification.

Before moving on to the comments of the Federation of Small Businesses, I want to make one other comment. What assurances can the Government give that the better regulation delivery office will retain the independence and technical expertise that the LBRO had? Can the Minister assure us that the office’s important work will continue with the same vigour within BIS? It needs to be strengthened rather than weakened.

Interestingly, the Federation of Small Businesses has articulated concerns about the abolition of the LBRO, which it says plays a “vital” role in tackling regulatory burdens:

“LBRO must not be scrapped but overhauled if small firms are to truly see a reduction in regulation”.

The Federation of Small Businesses has also said:

“Raising the standard of inspections and making the process of inspection a positive experience is the cheapest and fastest route to improving the overall perception of the regulatory burden. The FSB believes the Local Better Regulation Office (LBRO) has a pivotal role to play in this process”.

I think that the Government have quite a way to go to convince everybody that the better regulation delivery office will be as good as the Minister has asserted.

There has also been a bit of an argument about the representative steering group. The Explanatory Memorandum states:

“Responses on the question of the proposed membership were evenly split, 50-50. The basic proposition to establish the group was supported, half the respondents agreed with the proposed membership, but others wanted to see the balance changed”.

The role of the representative steering group will be important. Given the assurances on transparency and accountability, I would welcome an assurance that the notes of the meetings of the representative steering group will be published.

I eagerly await the Minister’s response to some of those questions.

[Lord Borrie]

My Lords, I wonder whether I might intervene at this point. I am very disappointed with the order and its accompanying Explanatory Memorandum. It is very useful to have the Explanatory Memorandum, but an examination of it reveals—as my noble friend Lord Young has shown—that it makes a number of points that stress almost the opposite of the objectives and successes that the Minister has claimed for this order. For example, the Minister talked about the greater transparency, accountability and strength that will be provided. However, I am not sure that there will be greater transparency when the body is transferred inside a government department, where its work and effort will no longer be as clear as that of an NDPB. The savings that are claimed are said to be modest, which is not a very great strength for the change, while the response rate for the consultation on the order is also said to be low.

--- Later in debate ---

[Baroness Wilcox]

I am trying very hard to make sure that I can answer as many questions as possible. It does not seem that long ago that I was standing in this Room—perhaps it was a couple of years ago—at the birth of the LBRO. At that time, I wondered whether we needed another organisation. Here I am now saying that we do, but that we are going to keep it to ourselves and I am going to be responsible for it, whatever it does. I thought that I had made a very long and detailed speech to try to cover as many points as I possibly could this time round, but obviously all I have done is to provoke people with expertise in this area to come back at me with questions. I hope that I am going to be able to answer them.

The noble Lord, Lord Young, talked about the Federation of Small Businesses. Small businesses want to see greater benefits. One is that we have announced that we will make assured guidance available to them: a benefit of the primary authority. He also asked about the primary authority. The power to direct remains in the case of the primary authority; it is in other guidance where the power to enforce will be removed. He also spoke about the RSG minutes. We have not yet considered publication of the minutes, but we will look at that proposal. It was not raised in consultation, but I see no reason why they should not be published. If there is no great objection, I do not see why he should not have what he has asked for.

The noble Lord, Lord Borrie, said that the savings will be very modest and will not in themselves address the deficit. That is not quite what we meant. The savings, which will be £6.4 million over 10 years, are not insignificant given the financial situation we find ourselves in. I hope I was very clear in my statement that we want to make sure that the excellent work that the LBRO has done continues, but any money at all that we can manage to save by reorganising should be saved. We hope to be able to continue with the same people and do the same work while cutting the overhead costs.

The noble Lords, Lord Borrie and Lord Razzall, talked about the representative steering group’s split responses. The role of the RSG was supported by 80 per cent of respondents and any split responses reflected a debate as to the membership, with many of the respondents actually wanting to be on it themselves. That was the real balance of the argument there.

In reply to the noble Lord, Lord Borrie, on accountability, the RSG will represent a balanced range of stakeholder perspectives and aim to strike the right balance between the regulators and those whom regulation seeks to protect; to provide advice on the strategic direction and approach of the organisation; to provide oversight of the operation of the primary authority to ensure that due process is followed; and to have its membership reviewed regularly and refreshed to open up engagement and encourage new perspectives. It will be no more than 12 individuals, not operate as a formal body and not oversee day-to-day operations of the BRDO, which we hope will add even more to the great work that it has already done.

The noble Lord, Lord Razzall, talked about the property assets. In answer to his question, no—lease transfers will be consolidated with other BIS estates. Sadly, we do not have very expensive property assets that we can get rid of. I note that the noble Lord supported what I introduced today in this regard. On his question about whether employees have agreed to come, yes, all the employers in post at the date of transfer have agreed to be transferred to the department and will continue to work from Birmingham for the foreseeable future. The noble Lord also asked about business sign-up. As he suspected, business had some concerns. We have certainly attempted to listen to those; the operational independence in the primary authority is an important element of that, and keeping the business reference panel is also important. Businesses have questions, but are broadly supportive of the proposals. We will of course continue to listen to their questions and worries as we go forward.

Consistency and continual improvement in the regulatory landscape are essential if we are to progressively strive to provide an even stronger, more supportive environment in which our businesses can strengthen, prosper and grow for the benefit of our whole economy. The needs to support greater transparency and accountability, to create a more effective regulatory policy on development and to provide a strong voice for regulatory reform at the heart of government are not in dispute. This order underpins those objectives, and I therefore commend it to the Committee.

[Lord Young of Norwood Green]

I may have misheard the Minister when she said that the power to direct local authorities will remain. That is what I thought I heard, but I would like some clarification, because the Explanatory Memorandum is quite clear that the power to direct local authorities goes and the power to enforce service improvement will be stopped. What then remains is just a question of guidance to local authorities, so I would like some further clarification.

[Baroness Wilcox]

I thought that the answer I gave was that the power to direct remains in cases of primary authority and it is other guidance where the power to enforce will be removed. I shall see whether I can get a clearer response for the noble Lord.

[Lord Young of Norwood Green]

In that case, I think the Minister needs to clarify the memorandum.

[Baroness Wilcox]

The powers of enforcement are in Part 2 of the Act, and they remain. In the Regulatory Enforcement and Sanctions Act 2008, Section 7 is repealed, if I have that right. If that is not clear—

[Lord Young of Norwood Green]

Perhaps I can try to be helpful, because I do not want us to take up more time than we need to, but that is not quite what it says in the Explanatory Memorandum. I notice that the Minister’s officials are nodding. Perhaps the best thing that the Minister could do is to write to us and clarify the situation.

[Lord Razzall]

Perhaps the Minister could specifically explain, when she writes, how what she said relates to paragraph 8.5 of the Explanatory Memorandum, which seems to suggest that,

“the power to direct local authorities, and … to enforce service improvement will be stopped”.

It does not seem to reflect that, but that is actually what it says.