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This section contains further information on the measurement exercise and how it fits into the wider programme of simplification.
As part of the Government's commitment to Better Regulation, it has pledged to produce departmental plans for simplification which will be published at the Pre-Budget Report 2006. Each department is developing an overarching simplification plan, which will include its plans for admin burdens reductions.
Simplification plans will need to demonstrate how a net reduction in admin burdens will be delivered. This means that as well as reducing admin burdens from existing regulation, the admin burden of new regulation will have to be minimised. This will be costed using the Standard Cost Model (SCM), which is currently being used to measure the existing burden (of active regulations in force up to May 2005), and should now be used to measure the cost of new burdens.
Admin burdens are those activities which must be undertaken in order to comply with regulation, for example, form filling, keeping records or responding to information requests.
The Admin Burdens measurement exercise is focusing on such administrative activities rather than whether the regulation itself is reasonable or not, i.e. the policy objective. Through focusing on the way regulations are administered and enforced, it will ensure that burdens are reduced without removing the necessary protection that regulation can provide, for example for employees or the environment.
The measurement exercise is a short and intensive exercise to engage with business, charities and voluntary organisations to gain understanding, to take stock and to establish a baseline against which targets for admin burdens reductions can be set. Targets for achieving admin burdens reductions will be set for each department over coming months as simplification plans are published.
The exercise is a valuable opportunity for these sectors to have their say and to provide government with the evidence of the cost for completing paperwork, keeping records and providing information.
The Standard Cost Model SCM method is a way of breaking down individual regulations into a range of manageable components activities that can be measured. The SCM does not focus on the policy objectives of each regulation but on the administrative cost it imposes. The measurement focuses only on the administrative activities that must be undertaken in order to comply with regulation and not whether the regulation itself is reasonable or not.
It involves identifying the regulations that impose an administrative burden on businesses, charities and voluntary organisations followed by systematic measurement of the cost of that regulation across government through extensive interviews with individual businesses, charities and voluntary sector organisations.
To learn more about how the UK Standard Cost Model Manual is being adopted in other countries, visit the SCM Network website.
The government announced on 15th September 2005 that the measurement exercise had begun. The measurement exercise work is ongoing and is currently in the second of its three phases:
Phase 1 - involves identifying the regulations and their component parts (see question 'What are Admin Burdens') to be measured;
Phase 2 - involves identifying appropriate organisations to interview to find out what the admin burden cost is in meeting the requirements posed by any given regulation;
Phase 3 - involves analysing the data gathered in Phases 1 and 2. Throughout, Measurement Monitoring Groups in each government department will advise and challenge emerging findings.
Estimates of the time taken for each activity are obtained for a 'normally efficient' business. The method we are using - the Standard Cost Model - is not a prescriptive approach to measuring the admin cost of regulations. It is a pragmatic and systematic approach and uses a full range of diverse measurement methods - telephone and face to face interviews, expert panels and assessment. The most appropriate method for measuring each activity required by a regulation will be used.
In parallel to this, engagement with stakeholders will be important to gain support for the exercise and to take steps to encourage business, charities and voluntary organisations to take part in interviews if they are approached, or wish to register their own interest in being interviewed. Stakeholder support will be critical to helping secure these interviews. Download the fact sheet from this site for more information.
Members of the Pricewaterhouse Coopers (PwC) interviewing team will contact businesses, charities and voluntary groups across the UK to request their participation in the study and arrange appointments for the interviews where appropriate. The interviews will be confidential and held at times which are convenient for respondents and are running through January 2006. If a potential respondent requests further information, the PwC fieldwork team will email or fax them an introductory letter explaining the benefits of the study to encourage participation.
We are setting up panels of experts mainly to assess areas of regulation that are; particularly complex, apply infrequently, or which affect only a small number of organisations. Details of how to register your interest in taking part can be found in the contacts section.
Measurement Monitoring Groups are operating at both strategic (Cabinet Office) and departmental level. The primary role of these advisory groups will be to review progress throughout the measurement exercise, to ensure consistency, to challenge emerging data and to offer advice to departments. Advice may be sought on issues such as ensuring the project reaches a diverse selection of businesses, charities and voluntary organisations for interview. Membership includes external stakeholders with a key interest in the regulation a particular department is responsible for.
Groups have been established in each department. They have a key role working with government departments to deliver a baseline which businesses, charities and voluntary organisations will recognise. External membership of the groups adds the perspective of these sectors throughout the measurement exercise and subsequent reporting on outcomes.
In accepting the BRTF recommendations the Government was clear that action is required to strengthen the structure to manage the total regulatory burden. The Government has committed to delivering reductions in the administrative burden over the lifetime of this Parliament and to setting targets for reductions. This is based on an approach the BRTF summarised as 'what gets measured gets done'. This involves first identifying where the administrative burden is, estimating the associatated costs, and then setting targets for reducting it.
The measurement exercise will be a tool against which departments can monitor progress against their own targets and plans. Additionally it will be an important way for business, charities and voluntary organisations to hold the Government to account in delivering better regulation and actively reducing burdens, while maintaining the protections that necessary regulation provides.
Implementation of the SCM includes all central government regulation. Central government is defined as all bodies that are principally controlled and financed by central government, including all agencies and arms-length bodies. Regulation emanating from the Scottish Executive and Welsh Assembly is not included in the measurement exercise.
Regulation is such that failure to comply with it would result either in the business coming into conflict with the law, or being ineligible for continued funding, grants or participation in schemes. This should be taken as a broad definition and include non-statutory schemes or agreements which the Government has chosen to back rather than legislating. Non-participation in such schemes implies that formal regulation may follow, and as such they are effectively mandatory.
Departments have already identified their regulations which fall within the scope of this exercise, whether it is domestic or international in origin which place an administrative burden on business, charities and voluntary organisations and were in force at May 2005.
An information obligation is a duty to procure or prepare information and subsequently make it available to either a public authority or a third party. It is an obligation businesses cannot decline without coming into conflict with the law or being ineligible for continued funding, grants and other applied for schemes. Each information obligation consists of a number of required pieces of data that businesses have to report.
Examples include: corporate tax returns, drawing up and registering annual accounts, applying for permits, general obligations to retain business records, provision of information on sick employees to working conditions services, annual statement of employee insurance to the social security body, on-site control of employee permits.
The exercise conducted by HMRC is the same as that being co-ordinated from the Cabinet Office across the rest of government. Both are using the Standard Cost Model to carry out costings to establish a baseline.
The complex nature of tax required a specialist team. HMRC concluded that the best approach was to conduct a separate, but parallel, procurement exercise and subsequently appointed KPMG.
The key finding of the HMRC study were published in the 2006 Budget Report, with further details released on their website on 11 April 2006.
The timescale leading to the implementation of this initiative to first measure and then reduce the administrative burden placed on business charities and voluntary organisations by regulation is as follows:
18 October:
March:
March:
May:
18 July:
15 September: