The Office for Future Regulation

Firstly, by giving businesses the confidence and certainty to invest by ensuring regulation is deployed consistently – particularly against the big growth priorities for the economy, such as net zero. The UK has an incoherent, and often fragmented, approach to regulation across government, with departments and regulators often uncoordinated in their approach to regulation, causing uncertainty and confusion for firms.

Second, by giving economic regulators clearer guidance to help manage trade-offs. What started off as a system of clear primary objectives around competition and consumer protection, has evolved into a Christmas-tree approach of continually asking regulators to do more, building complexity into the system.

Finally, the existing regulatory regime ratchets risk aversion and red tape on to both regulators and regulated, stifles innovation and fresh thinking. Reshaping our regulatory regime as one that is focused on outcomes, not rules, can be a central pillar of the UK’s long-term economic growth in the post-Brexit world.

To fully grasp the Brexit dividend and streamline the UK’s regulatory system the CBI proposes the Government establishes an Office for Future Regulation (OFR).  

The OFR would have two objectives:

1. To oversee a strategic ‘whole systems’ approach to regulatory priorities across government.
2. To enable the regulatory framework to identify and support future opportunities for growth and innovation.

Based in the Cabinet Office, the OFR would return strategic responsibility for regulatory reform back to the centre of government, while rationalising and reducing the administrative burden within government. In doing so it would increase co-ordination and cross government oversight of regulation.

The OFR would also help facilitate a shift to a more ‘outcomes based cooperative’ model of regulation and in doing so create a distinctly British model that would give UK plc a competitive advantage against the EU’s centralised, legalistic approach.

With the technological revolution both disrupting existing markets and creating new ones, the OFR would be tasked with supporting the development of dynamic regulatory approaches which grasp the innovation potential of the UK economy and in doing so give the UK first mover advantage on the emerging growth bets for the economy.

Objective 1: To oversee a strategic ‘whole systems’ approach to regulation across government, the OFR will: 

Co-ordinate the adoption of better approaches to regulation, with a focus on an ‘outcomes based collaborative approach’:

• Systematically and strategically review the statutory duties, objectives and processes of existing regulators, with the objective of providing recommendations aimed at achieving less burdensome approaches to regulation. This should focus on the application an of outcomes based collaborative approach’ to regulation. Further reviews should be conducted periodically, as determined by the OFR.
• Developing a ‘best in class’ internal challenge function for regulators to adopt, drawing on feedback from those who are regulated and consumers to help foster collaboration and shared ownership.
• Promoting the development and professionalism of regulatory staff building on the expertise of the Institute of Regulation.
• Providing guidance to regulators on how to deliver on their statutory duties more effectively, including on the development of their own industry specific Strategic Policy Statement (SPS).

Co-ordinate how regulation is utilised across government departments to deliver on long- term strategic priorities, such as net zero, by:

• Facilitating co-ordination between regulators on their remit and policy actions on cross-sectoral policy priorities to ensure consistency and avoid duplication, regulatory gaps or overlapping regulation. (Coordination and join up is particularly important across digital regulation as regulatory remits expand and firms face significant new rules.)
• Providing clarity to regulators, government departments, and businesses over these long- term strategic priorities by providing a SPS over a 10-year horizon.
• Working with government departments to develop and assess regulatory policies against the priorities identified in the OFR’s SPS. This will support the different functions of individual regulators and protect their operational independence. Where regulators feel that their statutory duties are in conflict, they will have the capacity to request updated ‘strategic guidance’ from the OFR.

Objective 2: To enable the regulatory framework to identify and support future opportunities for growth and innovation, the OFR will:

Build on the work and expertise of the RHC by supporting the development of in regulation areas of high value growth:

• Continuing the work of the Regulatory Horizons Council (RHC) by providing the government with impartial, expert recommendations on regulatory reform to support the rapid and safe introduction of technological innovations based on the potential benefit for the UK economy and society while protecting citizens and the environment.
• Working collaboratively with other government advisory bodies, such as the OSTS to identify technologies with high potential for the UK economy and society.
• Monitoring the government’s progress in delivering reforms and evaluating the impact of the recommendations.
• Working with government departments to consistently implement the regulatory reforms it recommends.

Oversee the increased use of regulatory sandboxes and other frameworks to support innovative practices:

• Using regulatory sandboxes to create a space for businesses, regulators, academics, and consumers to develop and test how new business models, technologies, and policies can be deployed and used in a way that is safe and responsible.  This would build on the successful models operated by UK regulators and forums like the FAC, ICO, and DRCF.
• Focusing these groups on strategic areas of technological development and high-value growth, such as telecommunications research and development, artificial intelligence, and robotics. This is important as the application of many of these technologies will involve several regulators.
• Using these sandboxed to provide a safe and genuine forum for discussion between regulators, business and stakeholders and a space where cross-industry lessons can be shared and applied.
• Developing less resource intensive frameworks to enable and support business to test innovative business models such as toolkits or an FAQ helpline.
• Using these arenas to develop the necessary skills and common capabilities within the regulatory professional body required to support innovation and growth.

Promote the UK as a global regulatory leader by:

• Working with the Regulatory Diplomacy initiative with the FCDO to promote the UK as a world leader in regulatory standards the UK’s Institute of Regulation across the identified growth areas.
• Supporting the work of the Agile Nations initiative to pave the way for likeminded nations to begin collaboration that supports more effective regulation and approaches to agile governance

Operational function: 

• The OFR would be established as an Executive Agency, sponsored by the Cabinet Office.
• The roles of the Regulatory Horizons Council and Better Regulatory Executive, both currently established as independent advisory bodies to BEIS, would be brought under the OFR.
• To provide a greater level of political and long-term stability, the OFR would be led by a Management Board, headed up by a non-executive chair, and with executive and non-executive board members. The Management Board would consist of representatives from the fields of academia, business, and consumer representation.
• The OFR’s Chief Executive and Chair will be appointed by the Chancellor of the Duchy of Lancaster, as the lead minister in the sponsoring department.