Guidance

Supplementary guidance note on the use of the previous Framework

Updated 19 September 2023

Reforms to the Better Regulation Framework and transition to the new Framework

1. With effect from 18 September 2023, a new process for scrutinising regulatory provisions, under the Better Regulation Framework (BRF or Framework).This supplementary note details what this will mean for the regulatory proposals that have been progressing under the previous system, or elect to use that approach during the transition, and how this system will continue to operate alongside the reformed Framework.

2. This guidance note also explains how the previous guidance should be interpreted in light of the removal of the Business Impact Target (BIT), under section 18(1) of the Retained EU Law (Revocation and Reform) Act 2023 (REUL Act). These changes are covered in detail in the following section.

3. Following the publication of the new Better Regulation Framework guidance, the reformed system will be live, and departments will be able to submit any new regulatory provisions for consideration under the reformed system.

4. However, new policies require long lead-in times, from conception to being ready to announce or consult on a lead regulatory option. This can be to ensure alternatives to regulation are fully considered, enable the gathering of sufficient evidence, and that the proposals have been through the independent scrutiny process (where relevant) before publication. Transition arrangements are therefore necessary to accommodate the progress of existing work and policy development.

5. This transition period will last 12 months. Until the start of September 2024, departments can seek collective agreement to a consultation or announcement for a new regulatory provision using either the previous or new Framework. For the avoidance of doubt, either choice is acceptable during this transition at the discretion of the relevant minister.

6. In addition, some current regulatory provisions see the Framework guidance for the definition) will already be past the early-stage collective agreement point, for example, if they are at or past the point of a consultation on a lead regulatory provision. These will have been developed using the previous BRF and should therefore continue on that basis.

7. The transition will not result in any gaps in coverage – all relevant regulatory provisions will either use the previous or new Framework.

Examples of which Framework applies

Example 1: Seeking collective agreement in March 2024

A department plans to announce plans for a new regulatory provision. This is within the transition period and it is at their discretion whether to use the previous or new Framework.

Example 2: Seeking collective agreement in October 2024

A department plans to seek collective agreement in October 2024 to announce plans for a new regulatory provision – for example using a consultation
where it is a preferred option. This is past the transition period and they must
use the new Framework.

Example 3: If using the previous system

Referring to example 1, if a department chooses to use the previous system within the transition period then the regulatory provision will continue to use the previous system – including beyond September 2024 where relevant.

Changes to the legislation underpinning the previous Better Regulation Framework

1. The Retained EU Law (Revocation and Reform) Act 2023 repealed sections 21-27 of the Small Business, Enterprise and Employment Act 2015 (SBEE Act) with effect from 29 August 2023. Under section 21 of the SBEE Act, the government was under a statutory duty to set a BIT in respect of the economic impact on business, voluntary and community bodies of qualifying regulatory provisions (QRPs) that had come into force, or ceased to be in force, during the life each Parliament.

2. Section 21 of the SBEE Act required the government to report annually on progress against the BIT. The progress report included information on the QRPs that came into force, or ceased to be in force, during the relevant parliamentary year and an assessment of the economic impact on business of those regulatory provisions.

3. Section 24A of the SBEE Act, required relevant regulators to publish an annual report which included a list of their QRPs, an assessment of the economic impact on business of each QRP and a summary of non-qualifying regulatory provisions (NQRPs). The content of these documents was included in the BIT annual report. The final BIT report was published in 2021-2022, and this report explained the government’s intention to remove the BIT.

4. The repeal of the BIT has enabled the new framework to take a more holistic approach to the consideration of new regulatory provisions. It allows for a more flexible and responsive approach to the measurement and scrutiny of impacts. This is expected to improve policymaking and support a key government objective to minimise the burdens of regulation on business.

5. It is important to note that, the statutory requirements outlined in sections 28-32 in the SBEE Act, in relation to Post-Implementation Reviews (PIRs), remain (subject to consequential clarifications required due to the removal of the BIT).

The impact of the reforms on existing requirements and the role of the Regulatory Policy Committee

1. The next annual BIT progress report was due for publication by 16 January 2024, however with the repeal of the BIT requirements by the REUL Act, there is no longer a requirement for publishing this report. This will mean that related requirements, such as the duties on regulators to publish certain documents relating to their regulatory provisions will also fall away.

2. While the abolition of the BIT removes some of the statutory requirements that support aspects of the previous framework, the transition to the reformed system has been agreed as part of government policy. The previous framework will therefore continue, apart from the key exception of the removal of BIT reporting requirements, until the transition to the new framework is complete.

3. With the repeal of section 25 of the SBEE Act, the statutory role of the Regulatory Policy Committee (RPC) as an ‘independent verification body’ (IVB) of relevant BIT reporting requirements has been removed. As explained above, the operation of the previous framework will continue, again apart from the exception of the removal of BIT reporting requirements, until the transition to the new framework is complete.

4. As such, the RPC will continue to produce opinions in the current way although the figures verified in its opinions will no longer be being done in its prior role as IVB. This approach will be phased out as we transition to the revised approach to scrutiny in the reformed framework. The responsibilities of the RPC under the reformed framework are covered in the main guidance published alongside this document.

5. With regards to the de minimis exemption, although it had implications for which measures needed to be included in the reported BIT figures, it is an administrative device and therefore is unaffected by the removal of the BIT. Its continued use in the framework will ensure effort is focused on the measures with the most significant impacts.

6. The de minimis threshold will remain at £5 million Equivalent Annual Net Direct Cost to Business (EANDCB) for regulatory provisions using the previous framework, but will increase to £10 million EANDCB for regulatory provisions using the new reformed framework.^{[footnote 1]}.

1. The previous statutory guidance for Post-Implementation Reviews referred to a figure of £5 million EANDCB being a significant factor for determining if a review should be committed to. This has now changed in new guidance to £10 million EANDCB and applies to all new relevant measures, regardless of the transition arrangements. ↩