Re:State’s new report on Britain’s regulatory sprawl deserves the attention Danny Kruger has given it
GAWAIN TOWLER
There is a pleasing irony in the think tank formerly known as Reform producing the report that Reform UK seems to intend to act upon. Re:State, as it has been called since the rebranding, remains determinedly independent and strictly non-party. That has not stopped Danny Kruger seizing on its latest paper, last week’s Over Ruled: Why Britain has too many regulators and what to do about it, and declaring that a Reform government will do what the report’s authors can only recommend. Good. This is how opposition parties should prepare for power, by reading widely, borrowing shamelessly from the best available thinking, and giving credit where it is due.
The report’s opening finding is so absurd that it bears repeating slowly. Nobody knows how many regulators Britain has. Not the government, not the auditors, not the regulators themselves. The National Audit Office counts 90. The Institute for Government counts 116. The government’s own register, published this March and cheerfully described as a work in progress, finds 109. Only 85 bodies appear on both of the latter two lists. The state has constructed an apparatus so sprawling that it cannot enumerate its own components. Imagine a landowner who could not tell you, to within thirty, how many gamekeepers he employed, and you have the flavour of it.
What can be said with confidence is that the number is rising. Re:State’s author, Cory Berman, has done the hard archival work of charting every statutory regulator created and abolished since 1990, and the resulting graph climbs with the serene indifference of a tide. Even the Coalition’s celebrated bonfire of the quangos, which abolished or reformed nearly 300 public bodies, left Britain with seven more regulators than it started with. Twenty-one new bodies were created while fourteen ceased to operate. The bonfire, it turns out, was a compost heap. Everything thrown on it grew back thicker.
Berman calls this the regulatory ratchet, and his diagnosis of its mechanism is the most valuable part of the paper. Ministers confronted with a scandal find that creating a new regulator is more visible than expanding an old one. Independent reviews recommend new bodies because that is what independent reviews do. Pay flexibility, diluted focus, lost public trust, each provides its own respectable reason. Any single decision may be defensible. The cumulative effect is a landscape that, in the words of the paper’s interviewees, no government starting from scratch would ever design.
The costs are not abstract. Financial services firms alone spend more than £33.9 billion a year on regulatory compliance, the figure Kruger cited in his post. Government’s own estimate of the administrative cost of regulation across the economy is £22.4 billion annually. Water companies file more than 30 separate reports on storm overflows to three different bodies, each demanding its own subtly different template. Seventy per cent of businesses surveyed now pay external consultants simply to navigate the system, at an average of £10,745 a time. An entire industry exists to translate the state to its own citizens. More than half of British businesses regard the regulatory system as an obstacle to success. This is not regulation. It is friction dressed as prudence.
What lifts the report above the usual bonfire rhetoric is its refusal to promise easy wins. Berman is candid that institutional upheaval is expensive, disruptive, and frequently botched. The abolition of the Audit Commission ended up costing the Treasury money. The dismantling of Public Health England consumed a fifth of its senior leaders’ time in the middle of a pandemic. The report has clearly absorbed these lessons, and its prescription is correspondingly disciplined rather than pyrotechnic.
The architecture proposed is elegant. First, define what a regulator actually is and publish a live, comprehensive register, filterable by sector and function. You cannot prune a forest you have never mapped. Second, establish a Regulation Unit in the Cabinet Office with genuine accountability for the system as a whole, ending the present arrangement in which responsibility is smeared across three departments and a Public Bodies Team that nobody could name. Third, impose five strict tests before any new regulator can be created, all of which must be met, with the evidence published alongside the enabling legislation. Fourth, run rolling Sectoral Simplification Reviews, roughly five a year, explicitly tasked with finding consolidation and producing implementation plans, so that every sector faces scrutiny at least once a decade. Publish the costs and benefits. Build a playbook. Plan transitions properly.
The case study of the Independent Football Regulator shows why the tests matter. The process that produced the IFR took years, involved a fan-led review, a white paper, and consultations, and generated shelves of documentation. Yet the one question that mattered most, why a wholly new standalone body rather than housing the function within existing architecture, was never clearly answered in public. The Regulatory Policy Committee itself noted that the impact assessment would benefit from explaining the change of preference. As Berman drily observes, this may be a feature rather than a bug. Governments like implementing headline recommendations without demonstrating that they meet their own guidance. The proposed tests would make that impossible.
The health sector illustration is equally instructive. Nine professional regulators, overseen by a tenth, sit alongside the CQC, the MHRA, the HFEA, the Human Tissue Authority, and the safety investigations body. The oversight regulator has itself begged for consolidation. Public inquiries have repeatedly found the clutter an obstacle to preventing harm. And the government’s grand response, in this year’s King’s Speech, is to move one body’s functions into another. Labour came, saw the problem, and gave up, as Kruger put it. The report’s account of the health landscape makes the charge stick.
Which brings us to what Kruger’s endorsement actually signifies. The easy sneer against Reform UK has always been that it is a party of protest without a programme, a pressure valve rather than a government in waiting. The Kruger operation is the standing refutation. Here is the party’s head of preparation for government publicly engaging with a rigorous, footnoted, independently reviewed piece of work from a non-party think tank, one whose external reviewers include the Chair of the Institute of Regulation, and committing the party to its logic. Reform is not pretending to have invented the analysis. It is doing something rarer and more useful, recognising good work produced outside its own walls and preparing to give it the one thing a think tank cannot supply, which is power.
That outward-looking habit matters more than any single policy. Parties that only talk to themselves produce manifestos that read like fan fiction. Parties that read the Cunliffe review, the Corry review, the Fingleton review, and the accumulated wisdom of the NAO, and then commission or adopt serious synthesis of the kind Re:State has produced, arrive in office knowing where the bodies are buried and which of them deserve exhumation. The report gives any incoming government a roadmap that starts on day one, register first, unit second, tests third, reviews rolling thereafter.
Berman ends by noting that Britain’s regulatory system was once seen as a competitive advantage, and could be again with sustained discipline. Sustained discipline is precisely what the ratchet has never faced. A party willing to supply it, armed with a blueprint this thorough, would be doing the country a considerable service. Kruger has spotted the right report. The task now is to keep the promise it makes possible.
This article (The Forest of Regulators) was created and published by Gawain Towler and is republished here under “Fair Use”
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