HM Treasury

Pre-Budget Report

02 December 2004

Hampton Review of regulatory inspection and enforcement

Interim Report

In Budget 2004 the Chancellor asked Philip Hampton to lead a review into regulatory inspection and enforcement with a view to reducing the administrative cost of regulation to the minimum consistent with maintaining the UK’s excellent regulatory outcomes.

This interim report, Reducing administrative burdens: effective inspection and enforcement, outlines the issues relevant to the administrative cost of regulation, and suggests possible solutions. A list of questions for consultation form part of the interim report. The consultation period is open until 4 February 2005. A final report with recommendations to Government will be published in spring 2005.

The full interim report 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.

You can contact the team in any of the following ways:

email: hamptonreview@hm-treasury.gov.uk

fax: 020 7270 4414

letter: Philip Hampton, HM Treasury, 1 Horse Guards Road, LONDON. SW1A 2HQ

Consultation responses received after 4 February 2005 may not be considered, email responses are preferred.


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Philip Hampton

Philip Hampton joined the auditors Coopers & Lybrand, London, in 1975 and worked in London and West Africa. In 1981 he joined Lazard Brothers, working on mergers and acquisitions, as well as business restructurings in London, New York and Paris. From 1990, Mr. Hampton worked for British Steel plc as Group Finance Director, he became Group Finance Director of British Gas in July 1996 and BT's Group Finance Director in October 2000. From June 2002 until March 2004 he worked as Finance Director for LloydsTSB. In July 2004 he was appointed Chairman of J Sainsbury plc.

Philip Hampton graduated from Lincoln College, Oxford, where he gained an MA in English in 1975. He qualified as a chartered accountant in 1978 and is an Associate of the Institute of Chartered Accountants. He obtained an MBA from INSEAD in Fontainebleau, France, in 1980-81.


Questions for consultation

Measuring administrative burdens:

1. Is a standard methodology for calculating administrative costs of regulation possible

2. Is it desirable to have, and use, such a single methodology

Responsive regulation:

3. Should regulators make a commitment not to prosecute businesses who have followed simple guidance, except in the most serious cases?

4. Should regulators give greater emphasis to their advice services?

5. Should regulators evaluate their advice services on the basis of outcomes

6. Should inspection be targeted

7. Should regulators eliminate routine inspections for lower risk premises?

8. Should businesses with a good compliance record have inspection holidays?

9. Should risk assessment calculations include external factors such as accreditation or performance in other regulated areas?

10. Should regulators consult on their risk assessment methodologies?

More effective incentives:

11. Should the penalty regime be reformed to make penalties quicker and tougher?

12. Should businesses get prior notice of an enforcement action?

13. Should regulators discuss with business the potential application of a penalty before it is applied to allow the business to correct the infraction?

14. Should regulators be held accountable for enforcement actions that are later reversed?

15. Should a business’ past performance affect the level of a penalty?

16. Should there be more administrative penalties?

17. Should personal criminal sanctions be used more often?

18. Should company directors be held liable for serious infractions from which they are currently exempt?

19. Should penalties be set as a proportion of a company's turnover?

20. Should there be greater use of reputational sanctions?

21. Should there be restitutive penalties, where companies are required to remediate damage caused, or to fund improvements elsewhere?

22. Should there be more positive incentives for businesses to comply with regulation?

Dealing fairly with business:


23. Are the criteria for appeal mechanisms (transparent and easy to understand, be easy to access, resolve issues quickly, be fair and be seen to be fair) the right ones?

24. Should there be a central reporting point for conflicting regulations?


Simplifying regulatory structures:

25. Should regulators share information to improve their risk profiling?

26. Should regulators establish common reporting frameworks to minimise duplication of the data that businesses have to submit?

27. Should local authorities cross-train their staff, so they can advise and inspect on a wider range of regulations?

28. Should there be a single number or code to identify businesses?

29. Should there be a structural consolidation of regulators where appropriate synergies could be realised?

30. If so, what changes should be made?

31. What is the right level for inspection and policy setting in trading standards and environmental health?

32. How should local regulators join up their activities across boundaries?


Reducing the paperwork burden:

33. Should regulators be required to gain approval from a business reference group before introducing a new form?

34. Should regulators merge forms, with the aim of creating a single form for each business or in each sector?

35. Should the review set out a long-term ambition of a single electronic form?

36. Should the review set out the ambition to collect and examine all of the current forms to identify areas of duplicate information?

37. Should regulators share information on businesses to reduce the form-filling burden?

38. Should regulators provide businesses with pre-populated ‘check and sign’ forms?


Better central benchmarking of regulators:

39. Are the functions listed above the right ones to secure an improvement in the inspection and enforcement activities of regulation?

40. How could these new functions best be delivered without creating duplication and overlap?

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