Regulating for growth or benefits realisation?

Late last year, the UK government developed a strategy that requires statutory regulators to promote economic growth alongside their primary duties. The idea is that unnecessary red tape could be removed to help the economy grow. 

APM responded to the Public Accounts Committee (PAC) inquiry into regulating for growth earlier this year. To do that, we brought in experts from two of our interest networks: Benefits and Value, and Sustainability. They were supportive of regulation when it is done well: “When it is clear, stable, outcomes-focused and enforceable, it reduces transaction costs, improves productivity, widens market participation and increases investor confidence. Unclear, contradictory or frequently changing regulation creates friction, increases bid and delivery costs, favours large incumbents with specialist compliance capacity, and ultimately suppresses growth.” 

APM urged government to focus not on deregulation, but on better regulation that is clearer, simpler, more consistent and explicitly designed to support high-quality projects that drive long-term, sustainable growth. This can be done by reducing duplication across regulatory bodies, consolidating oversight capability, and using shared data and reporting platforms, all of which would reduce decision-making delays without reducing scrutiny. And we must not lose sight of the original reason for regulation. As one member of the interest networks said, “Regulation should be designed to reward delivery of the stated outcome, not simply remove constraints.” 

Have we got there? The PAC report provided six recommendations for government, including that it “should put in place arrangements to review how effective the different regulatory delivery models are, using the findings to improve the wider UK regulatory landscape and inform consideration of merging regulators”. This sounds like a good first step – streamlining will help make things clear and stable. But we can go further and celebrate the full range of benefits that projects provide. Social value is now mandatory in public procurement, and we’re starting to see business really think about the full tranche of benefits. 

In the end, we need people to stop asking how much a project will cost and to start asking what it will achieve.

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