75/01
2 July 2001
ANDREW SMITH WELCOMES UTILITY REGULATORS RESPONSE TO EFFICIENCY REVIEW
Gas and electricity, water, rail and telecommunications regulators have prepared individual action plans to implement the recommendations of an independent efficiency review published earlier this year. The key recommendations have been accepted, and each regulator has taken steps to implement priority recommendations. They will update industry and consumer representatives on further progress over the coming months.
Chief Secretary Andrew Smith commented:
?The independent report concluded that the UK Regulators are professionally run organizations. The regulators positive response to this report will led to further improvements in UK regulatory standards.
?Implementation of their action plans will increase transparency in budget setting, lead to better assessment of the costs and benefits of major projects, spread best practice, and help the regulators recruit and retain quality staff.?
The key elements of the improvements are:
- Increased transparency in budget setting;
- more effective stakeholder involvement ahead of publication of draft annual plans;
- draft annual plans to include more detailed cost information including identifying all projects over £250k;
- policy and support costs identified separately wherever possible;
- better impact assessment of costs and benefits of major projects;
- annual publication of each regulator's medium-term strategy. (Oftel which will review its medium term strategy as part of its preparatory work on Ofcom);
- developing the most appropriate form of regulatory impact assessment;
- post-implementation value for money reviews of major projects.
Retaining skills and expertise:
- regulators to pay more competitive rates to recruit and retain key staff; and, in return:
- regulators will continue to look for efficiency savings particularly in consultancy and support services.
Spreading best practice:
- better profile for joint working initiatives;
- more systematic identification and sharing of best practice;
- regulators to agree a consistent set of support service activity indicators with the eventual aim of publication.
NOTES FOR EDITORS
1. HM Treasury published an independent report by WS Atkins in February 2001 (Treasury press release 14/01) on the efficiency of the utility Regulators, Ofgem (electricity and gas), Oftel (telecommunications), Ofwat (water and sewerage), and ORR (rail). The report was based on: - approximately 50 interviews with senior staff at the four regulators.
- case studies of specific projects.
- questionnaire answered by some 80 stakeholders.
- detailed interviews with representatives of major regulated businesses.
- comparisons with similar public sector bodies in the UK and overseas.
2. The review made nineteen recommendations. Six were categorised as “priority” (to be implemented within twelve months), eight were considered “desirable” (offering significant benefits to be realised), and five were “for consideration” (where there is a need to look into the practicalities as well as the costs and benefits of implementation).
3. A full copy of the report is available on the Treasury website at the link below:
4. A number of the key recommendations relate to the Regulators’ draft annual plans. All the regulators publish a draft annual plan, which is put out for consultation around November each year. Final plans, the “corporate plan” for Ofgem, “management plan” for Oftel, “forward programme” for Ofwat, and “operational plan” for ORR are normally published the following March.
5. Media enquiries should be addressed to Charles Keseru in the Treasury press office on 020 7270 5188.
The External Efficiency Review document is available below in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website.
For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.