The Bill forms part of the Government's response to Philip Hampton’s report on reducing administrative burdens and Richard Macrory’s report on making sanctions more effective. The Bill has, therefore, been planned for some time, with a detailed consultation on a draft Regulatory, Enforcement and Sanctions Bill having been undertaken earlier this year.
The Bill has four separate but linked parts:
Local Better Regulation Office
Part 1 of the Bill seeks to establish a Local Better Regulation Office (LBRO) to "promote greater consistency amongst local authorities, and between them and central government, helping them work together to keep the burdens of regulation on compliant businesses to a minimum." The LBRO aims to address one of the areas for improvement identified by the Hampton Review; notably the lack of national co–ordination between Government departments and local regulators and a lack of consistency in risk assessment and enforcement between local authorities.
A non-statutory Local Better Regulation Office was established in May 2007. The Bill will re-establish it as a statutory corporation and the existing LBRO will be dissolved.
The proposed LBRO's key functions, will be:
- issuing guidance to local authorities in respect of regulatory services and, where necessary, ensuring that local authorities comply with this guidance;
- providing advice to Government on enforcement and regulatory issues associated with local authorities;
- reviewing and revising a list of national enforcement priorities for local authority regulatory services;
- encouraging best practice, and innovative approaches to the provision of local authority regulatory services, including through the provision of financial support and assistance; and
- Improving the coordination and consistency of regulatory functions and enforcement for businesses that operate across local authority boundaries.
Co–ordination of regulatory enforcement
Part 2 of the Bill establishes a statutory primary authority partnership scheme across the UK for businesses and other regulated organisations that operate across local authority boundaries. The LBRO will be responsible for the administration of the scheme.
The scheme will see local authorities register as a "Primary Authority" with responsibility for a particular business or organisation under a primary authority partnership. A Primary Authority will then be responsible for giving advice and guidance to its partner business or organisations and is also responsible for giving advice and guidance to other local authorities about how they should exercise that function in relation to that partner business.
Part 3 of the Bill sets out a range of new administrative sanctions that will be available to regulators to ensure that they are able to address non-compliance in a manner that is "transparent, flexible, and proportionate to the offence."
The four new civil sanctions provided for under the Bill are:
- Fixed monetary penalty (FMP) notices – which will allow regulators to impose a monetary penalty of a fixed amount;
- Discretionary requirements – which allow regulators to impose any one or more of the following:
- Compliance notices – which require a non-compliant business to undertake certain actions to bring themselves back into compliance;
- Restoration notices – which require a person to undertake certain actions to restore the position, as far as possible, to the way it would have been had regulatory non-compliance not occurred;
- Stop notices – where a regulator requires a business to cease carrying on any activity described in the notice until that business is in compliance with the relevant requirements; and
- Enforcement undertakings – would enable a business to give an undertaking to a regulator to take one or more corrective actions set out in the undertaking where a regulator that suspects that a business has committed an offence. A regulator is not, however, obligated to accept enforcement undertakings in any particular case.
- The proposals in Part 3 are aimed at implementing the recommendations in Professor Richard Macrory's 2006 report: Regulatory Justice: Making Sanctions Effective.
Finally, Part 4 of the Bill creates a new Ministerial power to impose a duty on regulators to review the burdens they impose with a view to reducing those burdens that are unnecessary or disproportionate, and to report on progress annually.
The Bill received its second reading on 28 November 2007 and will now proceed to the Committee stages.