Regulatory Delivery

Graham Russell, Christopher Hodges

• Publisher: Hart/Beck
• Year: 2019
• ISBN:
  9781509918607
• Edition: 1
• Topic: Law
• Subtopic: Administrative Law
• Index: Law

This ground-breaking book addresses the challenge of regulatory delivery, defined as the way that regulatory agencies operate in practice to achieve the intended outcomes of regulation. Regulatory reform is moving beyond the design of regulation to address what good regulatory delivery looks like. The challenge in practice is to operate a regulatory regime that is both appropriate and effective. Questions of how regulations are received and applied by those whose behaviour they seek to control, and the way they are enforced, are vital in securing desired regulatory outcomes. This book, written by and for practitioners of regulatory delivery, explains the Regulatory Delivery Model, developed by Graham Russell and his team at the UK Department for Business, Energy and Industrial Strategy. The model sets out a framework to steer improvements to regulatory delivery, comprising three prerequisites for regulatory agencies to be able to operate effectively (Governance Frameworks, Accountability and Culture) and three practices for regulatory agencies to be able to deliver societal outcomes (Outcome Measurement, Risk-based Prioritisation and Intervention Choices). These elements are explored by an international group of experts in regulatory delivery reform, with case studies from around the world. Regulatory Delivery is the first product of members of the International Network for Delivery of Regulation.

PART ONE

Why Delivery?

Introduction

GRAHAM RUSSELL

I.Take Three Envelopes – A Regulatory Parable

The Chief Executive sat nervously in his new office.

It was his first day as head of the regulatory agency and the thrill he had felt when first offered the position was now tempered with caution – daunted by the prospect of the challenges ahead. His imagination began to run wild. He pictured himself as a high-wire artist. Was this how Blondin had felt? Staring at the tightrope stretched across the Niagara Falls, aware of the drop beneath him, the calls to ‘keep your balance’ from either side rising above the crashing of the water onto the rocks far below?

With these images filling his mind, he was relieved to find three plain envelopes, left by his predecessor – tucked away in his desk on the day she left office. Having appreciated her advice when they had met a few weeks ago, he was pleased that she had left him some encouragement for his new challenge.

The envelopes were numbered, and the first was marked ‘Open after one year’ so he felt able to relax a little.

Those early weeks, his honeymoon period, rushed past. Buoyed up by the enthusiasm of staff and stakeholders alike, he sailed along on a tide of goodwill: making decisions, allocating responsibilities, reporting progress. But as weeks turned into months, that tide begin to ebb away. Problems turned into crises, resources were never enough, and he seemed to face equal criticism from those he should be protecting and those he was regulating.

It was with some relief that he reached the first anniversary of his time in post and opened the first envelope. What wise words would his predecessor offer to guide him through these stormy waters? He opened the envelope and took out a single sheet of paper bearing just three words:

‘Blame your predecessor’

While he was a little surprised, he was delighted with the authorisation provided by this clear instruction and responded straight away! Every criticism of the broken state of the agency, the lack of resources, demoralised workforce and flawed processes was quickly justified as a consequence of the misadventures of the previous Chief Executive. He explained that he was working to correct her errors, put right the wrongs of the past and steer the ship in a new direction.

This seemed to quell the concerns being expressed, in the short term at least. Government ministers recognised that he needed time to make his own mark; business voices were persuaded that the changes they looked for would happen and staff redoubled their efforts to ensure it was their voice that would determine the future direction.

However, even with skilful management of the news agenda there was a limit to how long his narrative could last. Well before the end of his second year, it was clear that something more radical had to be done. As the next anniversary approached, he was starting to ask fundamental questions about the shape, scale and scope of the organisation he had been asked to lead. So, he was reassured when he opened the second envelope, marked ‘Open after two years’, to discover the next three wise words:

‘Announce a reorganisation’

That’s exactly what I thought, he mused, as he stared at the words prepared for him ahead of time by his farsighted predecessor. Immediately he took out a blank sheet of paper and drew a new organisational chart – one that would move the more troublesome voices further away whilst ensuring that only those who shared his insights would have access to the key decisions.

The confusion of reorganisation had its impact. Everyone became busy, shuffling jobs and responsibilities. With all the power struggles that ensued, it was quite a while before any internal voice could be heard above the noise. Externally the appearance of activity was sufficient to distract stakeholders from the ongoing failure to make an impact on long-term outcomes or focus priorities on the areas of greatest risk.

Once again, the words of advice had granted some respite. But the Chief Executive knew that restructuring in itself could not solve all of his problems. As the reorganisation progressed, deeper questions about purpose and values were being asked and remained unanswered.

Inevitably these questions surfaced when a major review was announced by the responsible minister. The prospect of external scrutiny caused the Chief Executive some sleepless nights and the third anniversary of his time in office arrived just in time. Remembering how well his predecessor’s guidance had served him before, he rushed into the office desperate to discover a solution.

Tearing open the final envelope he read three final, fatal words:

‘Prepare three envelopes’

Whilst this story is not unique and can be found on the internet dating back to at least 2003 in a range of contexts, it is particularly relevant for the challenges of regulatory delivery. Having set up and run agencies to deliver regulation covering various disciplines from Trading Standards, Food Safety, Animal Health and Welfare to Community Safety, Claims Management and now Product Safety and Standards, I am acutely aware that each one is different. There are no universal guides and Regulation for Dummies hasn’t yet been written! Without a map to guide progress, or at least chart the territory, planning is frustrating, successes are tactical rather than strategic, best practice is seldom shared, and painful lessons are frequently repeated. The loudest voices, rather than those that most need attention, or perhaps might facilitate valuable change, claim the most attention.

The Regulatory Delivery Model explained in this book is borne out of these experiences – witnessed in the UK and around the world. While delivering regulation isn’t easy, there is an abundance of established good practice, more is being developed and there is plenty to learn from others. The model provides a guide for leaders and framers of organisations charged with delivering regulation. Regulatory delivery is a complex territory and a map is an essential tool.

II.Historical Context

In the UK when I trained as an inspector in Trading Standards in the 1980s, traditional risks in metrology and food standards were managed through routine, time-scheduled inspections (unannounced in that businesses were not advised that an inspection was coming but scheduled sufficiently tightly that one business responded to our arrival with the words: ‘I was expecting you yesterday!’). Areas seen as more novel, which at that time included consumer credit and trade descriptions, were more likely to be addressed through investigation of complaints – sometimes linked to withdrawal of authorisation to trade.

Historically, delivery of regulation has utilised some variation of these three principal ways in which regulatory agencies assess and control the behaviour of the regulated: pre-entry authorisation (licensing); in-service supervision (inspections); and post-event assessment (investigations).¹ The origins of this thinking, and its development in several states, is explored by Florentin Blanc in his review of regulatory history.² My experience, in the UK and more recently in other jurisdictions, has been that while there is significant variation in allocation of effort to these options between contexts and countries, there is limited appetite to explore that variation (which seems to arise as much from risk appetite in the local culture as it does from the scale or nature of the risk). Operators of regulatory systems don’t necessarily wish to identify the reasons for their system, to justify its design, to change the local shape or to explore alternative options.

We will return to this analysis in chapter twenty, but back then, as a newly qualified officer, I can recall questioning whether more was expected of me than simply fulfilling my quota of routine inspections. Like many new entrants to a career in public services, I was keen to make an impact and motivated to serve those members of society who most needed protection. Having studied for three years and satisfied the examiner in numerous exams, I had been given the authority to enforce the law, and I had a warrant card to prove it – surely, I should use these powers for some purpose?

Authorisation as a newly qualified Trading Standards Officer (1990)

However laudable these aims may have been, they were hardly unique. I read recently of an officer appointed to his first inspector’s post back in the 1950s who was able to persuade his deputy Chief Officer that, if he completed all his routine inspections ahead of time, he could take half a day a week to carry out more interesting proactive investigatory work!³ Neither did new thinking start in the UK, not even in 2005 with the much-quoted Hampton Review.⁴ As Blanc has pointed out,⁵ eighteenth-century guilds regulated for prosperity as well as protection, and when the UK Government set up the Health and Safety Executive in 1974, it restructured several predecessor inspection agencies around a common purpose and gave the new agency an expectation that risk assessment would be built into its ways of working.

I was fortunate to join a team of like-minded individuals in Burton-on-Trent working for Staffordshire County Council.⁶ We worked hard and investigated and prosecuted more offences than ever before, including the first prosecution for weights and measures offences for 30 years! While this gave a certain sense of satisfaction (and may have annoyed colleagues for its Stakhanovite pretensions), did it contribute to the outcomes for which we were set up?

My father certainly didn’t think so. As the owner of two small retail shops, he took a dim view of me working as a Trading Standards Officer and loved to recount the story of the day two officers came into his shop in Walsall. They took away a sample of erasers on the basis that they might be mistaken for sweets by young children. Months later they returned with test results which showed that the items were in fact ‘dangerous’. They demanded to seize the stock, which had long since been sold, and accused my father of various heinous crimes with accompanying threats. He reasoned that while he was occasionally frustrated by the behaviour of his customers, harming them didn’t form part of a sustainable business model and that if highly qualified Trading Standards Officers took three months to decide the erasers were dangerous, how was he supposed to know?

Experience showed us that time spent with a business – for example assisting a small food producer to think through provisions for checking the weight of packages; providing training in understanding the outputs of complex weighing machines and introducing quality assurance methods – is not only likely to be more agreeable to the business than formal interviews under caution but also more likely to inculcate long-term change. While compliance depends on the intent of the regulated entity, and criminality should always be punished, creating and embedding a sustainable change in behaviour is much more likely to happen when the regulatory agency engages with the business than when they rap on the door, however large the stick. The UK’s Food Standards Agency demonstrated this with its Safer Food, Better Business approach.⁷ More recently, research comparing the impact of different approaches by four municipalities in Staffordshire (discussed more fully in chapter thirteen), has evidenced the impact that a supportive approach can have on business survival as well as compliance.⁸

Reviewing the lessons of that period reminds me that we made many mistakes and false starts, but it does seem to point to two conclusions. Firstly, that even though the range of interventions formally available (licensing, inspection and investigation) was very narrow, in practice officers were using a wider range of options to achieve regulatory outcomes. But secondly, and crucially, that in the absence of a secure authorising environment, the selection of these tools lacked the organisation, intent, assessment and impact that a professional would want in their work.

As I moved on, working with valued colleagues leading services across the West Midlands (including Sarah Smith, then the youngest Head of Service in the country at Solihull Council and 20 years later still provoking me to improvement as Deputy Chief Executive), we saw the impact that transparency could have on internal culture and the importance of the citizen as a beneficiary of regulation and as an actor for improvement. But we also saw the extent to which established practice tended to drive resource allocation.

In reviewing files recommended for prosecution, I was struck by the way we considered it valuable and constructive to spend as many as 150 officer-hours putting together a report to prosecute the owner of a small shop for selling alcohol, cigarettes, videos or solvents to a young person, but much less valid to spend even a third of that time training the shop owne...

Table of contents

• Cover
• Title Page
• Foreword
• Contents
• About the Contributors
• List of Abbreviations
• List of Figures, Tables, Boxes
• PART ONE: WHY DELIVERY?
• PART TWO: THE REGULATORY DELIVERY MODEL
• PART THREE: INTERNATIONAL BEST PRACTICE EXAMPLES
• PART FOUR: REFLECTIONS
• Annex 1: UK Regulatory Reform Key Dates
• Acknowledgements
• Index
• Copyright Page