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The chairman of Legal & General and the writer of Barclays UK are former Treasury officials and members of the government’s Industrial Strategy Advisory Committee.
Don’t make any mistakes. The UK Prime Minister’s commitment to reducing the cost of managing regulations by 25% is either a big deal or a big deal. But how can this appetizing promise not disappear like the mirage of Whitehall Sand?
The government has pledged to establish a quantified baseline to measure progress and has set a timescale to meet targets (end of this parliament). If it commits independent validation of advancements, elements of a robust framework are introduced.
But it sets a monumentally tough work in itself, especially as the same government has introduced many new regulations and has created its own headwinds.
None of this could be successful without one important thing. Do someone else’s job to ensure your promise.
History is useful. Having set a similar target, Tony Blair created a great regulatory executive (BRE), a very small unit in the cabinet office. This was led by an energetic outsider, Oscar-winning visual effects entrepreneur William Sargent, and supported by ferociously effective official Zittinder Kohli. The unit could be hired from outside, including young Jacinda Ardern. He later became Prime Minister of New Zealand. Sgt was given access to the Prime Minister, Cabinet Secretary and the Ministry of Finance and the Ministry of Finance.
This clearly had an impact. The unit had only been busy success in working hard on the new regulatory trend, but certainly there were a few. Meanwhile, the target to reduce administrative burdens quarterly has been measurably delivered.
So it’s strange that it was allowed to quietly wither. At this point, the regulatory bandweed inevitably began to regenerate – as always, without suppressing control and pruning.
Kiel Ir Starmer now needs to reinvent it. And we know the main ingredients: extreme leans of size. High quality people. They are at the heart of government where they have access to key players. External leadership willing to fight Whitehall Fudge and compromise.
It can be usefully combined with the proposed regulatory innovation office, a well-intentioned but narrow initiative of the science department. WhiteHall doesn’t require two good regulatory units. More importantly, the insights behind Rio – good regulations should promote disruption that doesn’t hinder it – should have applications that are much broader than the current technology focus.
The priorities also missed the trick in limiting his promise to business regulations. What about the public sector? Red tape is a source of trouble for nurses, teachers and police. At the time, BRE was doing well not only public sector regulations but also private. Priority targets should cover both.
Finally, we must seriously consider why some regulators are not as good as possible. One obvious issue is the relentless increase in size, with the number of staff at all major regulators growing incredible size. Especially given the harsh forces and limited accountability, people naturally create jobs, processes and costs that are not justified by profits.
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Talent can also be an issue. This is especially true of competition and market powers, Ofwat and Ofgem, which are some of the most challenging regulators. Absurdly, they are even liked by other public sector regulators who are not free from these constraints. The Treasury will need to impose new bargains. They will be released, but only alongside a sharp decline in staff numbers across the regulatory state.
If reducing regulatory size and improving quality has so many impacts, reducing the number of regulatory bodies risks distracting governments. Another task where powerful new units turn your aspirations into reality.
