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

My Lords, there are two main purposes of this order: to dissolve the Local Better Regulation Office and to transfer its continuing functions to the Secretary of State and Welsh Ministers. The legislation that is amended by this order comprises: the Regulatory Enforcement and Sanctions Act 2008; the Parliamentary Commissioner Act 1967; the Superannuation Act 1972; the House of Commons Disqualification Act 1975; and the Freedom of Information Act 2000. The order achieves three equally important things: first, greater transparency within the delivery of better regulation policies; secondly, greater accountability within the process of formulating better regulation policy, which, in combination, gives rise to ensuring that a strong voice for regulatory reform can be heard, supported and championed at the heart of government; and, thirdly, the opportunity to realise savings in public expenditure. In the specific instance of the LBRO dissolution, these savings are modest; however, they contribute to the greater efficiencies to be realised through our wider public bodies reform programme. I feel it is important to reassure my colleagues from the outset that the primary authority scheme, currently being effectively led and run by the Local Better Regulation Office, will continue seamlessly when this order comes into force. The LBRO is a small unit with fewer than 30 employees, but its effectiveness has led stakeholders to hold the primary authority scheme, and its other work, in high regard. The Government wholeheartedly support the continuation of this work; indeed we propose to extend it, and intend to bring forward separate legislation to do so. Delivering regulation in the right way supports business growth and it is right therefore that we should maximise the opportunities that good regulation can bring. This Government remain focused not just on reviewing the volume of regulation, but on ensuring that the way in which regulation is delivered is appropriate, effective and efficient. Improvements in the delivery mechanisms for regulation are of vital importance to the businesses that experience the enforcement of these regulations on a daily basis. Good regulation supports economic prosperity and consumer protection. The Local Better Regulation Office has been driving improvements in these areas since it was established as a non-departmental public body via the introduction of the Regulatory Enforcement and Sanctions Act three years ago. Regulation provides essential protections to society and brings invaluable benefits. A fair, efficient regulation system sees an expectation of equal treatment for all those affected by regulation, allowing our businesses the freedom to grow and to prosper with an understanding of what is expected of them and what they are expecting from regulators. Good, sensible, proportionate regulation is also consistent and appropriately targeted. I feel it is right that our businesses expect good regulation as the norm. Within this environment, we need to remain aware of the need continually to drive improvements, to ensure consistency and, as a Government, to lead quality regulatory reform, creating a supportive environment in which our businesses can grow and prosper. In October 2011, the Minister for the Cabinet Office announced proposals for reform of 901 public bodies, to increase accountability, to cut out duplication of activity, and to discontinue activities that are no longer needed. The proposals are a fundamental part of the commitment made by the coalition Government to increase radically the transparency and accountability of all public services and to reduce the number and cost of public bodies. This is a part of a wider programme of public sector reform aimed at giving a better deal for taxpayers, which is essential in these times of austerity, ensuring resources are targeted where they are needed most and using transparency to help the public hold the Government to account. The reform process aims to reinvigorate the public’s trust in democracy and also to ensure that the Government operate in a more efficient and business-like way. The review of the LBRO considered two main issues: first, whether all the current functions of the LBRO were still required and, secondly, how these functions could be best delivered, including whether the LBRO met the tests for continuing as an arm’s-length body. The review considered LBRO’s three core functions of administering the primary authority scheme; simplifying the national framework for local authority enforcement; and directly supporting local authority improvement. The first two were identified as being of clear and continuing value. However, delivery of those functions via a non-departmental public body was not felt to be the most appropriate or effective organisational structure. Various organisational options were discussed within the review process. The conclusion reached to ensure the best combination of independence, transparency, accountability, flexibility and stakeholder confidence, as well as value for money, was that LBRO’s work should be taken forward by a streamlined unit within the Department for Business, Innovation and Skills. This new unit would be called the Better Regulation Delivery Office and would continue LBRO’s excellent work with national regulators, policy departments, local authorities and business. A consultation on this policy proposal was held between June and September of 2011. Some 86 responses were received from LBRO stakeholders, including businesses, trade associations, local authorities and other local regulatory bodies, national regulators and professional bodies. The majority of responses received were positive and supportive of the proposed administrative changes. That indicates that we have navigated the right course in our proposals: taking into account the views, concerns and needs identified throughout the course of the review process. It should be noted that those responding took the opportunity to praise the expertise of the LBRO staff for representing their views and experiences in an effective way and for running the primary authority scheme with efficiency and effectiveness. This was especially true of business representatives. Professional bodies including the Chartered Institute of Environmental Health and the Trading Standards Institute commented on the expertise and delivery capability of LBRO and welcomed LBRO’s approach of working with them to improve professional standards and provide support to regulatory offices. The changes that the order will enact will see all that expertise retained while enabling a major step forward in taking regulatory reform to the heart of government, ensuring protection and growth for our businesses. Turning to the specifics of today's order, the order dissolves the Local Better Regulation Office and transfers its continuing functions of administering the primary authority scheme and simplifying the national framework for regulatory enforcement to the Secretary of State and the Welsh Ministers, as appropriate. It provides that the Secretary of State and the Welsh Ministers shall enter into a memorandum of understanding, which will set out in detail how the two Administrations will operate the transferred functions. That will ensure a closely co-ordinated approach across the territories, which is essential for our businesses working across geographical boundaries. The order will also provide for the transfer of all LBRO’s property, rights and liabilities to the Secretary of State. It provides for the application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 to the transfer of LBRO’s rights and liabilities relating to its employees. It provides the necessary repeals and amendments to be Regulatory Enforcement and Sanctions Act 2008 and other legislation that is consequent on the LBRO’s dissolution and transfer of its functions, property, rights and liabilities to the Secretary of State or to the Welsh Ministers. It also provides transitional provisions and repeals the power to enforce guidance given to local authorities. The administrative changes set out in this order ensure that stakeholders of the Local Better Regulation Office receive the same excellent level of service from the existing experts that they have built strong relationships with over the past three years. It will increase the transparency and accountability of its work, increase the impact of this work at the heart of government and make savings to the public purse. Most of the current LBRO experts will move into the Department for Business, Innovation and Skills on 1 April 2012 to form the Better Regulation Delivery Office. This distinct unit will sit within BIS alongside the Better Regulation Executive. The BRDO will have a clear delivery focus, working with businesses and regulators to simplify and improve the implementation of regulations. That will supplement BRE’s focus on how Whitehall generates and designs regulation. Bringing these two elements together within government will strengthen the overall package of regulatory reform. The BRDO will continue the operation of the successful primary authority scheme and provide support and evidence-based advice to regulators and to the UK and Welsh Governments. During consultation, the independence of LBRO in operating the primary authority scheme was repeatedly praised. I would therefore like to stress that this operational independence will continue. As Ministers, we will rightly want to satisfy ourselves that the scheme operates effectively, efficiently and fairly. That said, we will not generally become involved in the day-to-day operation of the primary authority scheme, or in individual primary authority partnership decisions. This operational function will be exercised by the experts who have been delivering this scheme so successfully for the past three years. 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.