Due to popular demand this is the third year we have run a regulation webinar. This year’s discussion focused on ‘Effective regulation in a climate of innovation’. If you were not one of the hundreds of people registered for the event, below are some of the highlights.

Why regulation matters

The relevance of regulation in achieving value for money for citizens cannot be underestimated. The NAO’s reports on regulation have covered areas as diverse as the private rental housing sector, food safety, energy suppliers and aspects of the financial services sector. Many of our studies have been triggered by world events, correspondence and inquiries from MPs; and issues of public interest.

This all suggests that regulators have a huge task grappling with the necessary regulatory response to manage wide-ranging societal pressures. The knock on effects from global affairs and risks arising from the interconnectedness of today’s world also increase pressure on regulators.

Our annual regulation event brought together like minded figures in regulation to help debate the issues and find solutions to our shared problems.

What are the issues?

The scale and pace of the changes regulators face in the economy and in their particular sectors are huge. The effects of EU Exit and the repatriation of powers and policy-making continue to reverberate, whilst issues around the cost of doing business; supply chain disruptions; high energy costs; climate and technological changes remain matters of concern for regulators.

Takeaways from the webinar

Competing priorities

Regulators have an ever increasing number of competing priorities to manage and not getting these priorities in the right order may have undesired consequences.

The government has made clear its agenda to promote growth and international competitiveness and has made this a statutory responsibility for key regulators in the financial services sector. The government has also expressed its intentions to extend this responsibility to other statutory regulators.

Responsive regulation

Regulators need to be able act quickly in response to risks and it is crucial to know what is needed, and what works, in order to respond effectively. 

We know from our previous work that regulation is often designed not to change quickly so as to help provide stability for markets and consumers, but this can constrain the speed at which regulators are able to respond. We also know that it can be difficult to judge the effect regulation is having, when the aims and outcomes of regulation depends on the performance of the companies being regulated just as much as the actions of regulators and consumers.

Looking forward

  • Work is being done on how regulation could be made less burdensome and making regulation less burdensome is top priority for government
  • It is important to constantly reassess whether regulation is fit for purpose and still delivering the intended outcomes. However, there needs to be flexibility to encourage and support innovation
  • Regulated companies should be encouraged to adopt more cooperative behaviours. This is to avoid the need for regulators to try to guess the potential risks and identify issues that should never have occurred in the first place
  • There is an opportunity now to think of regulation as a profession and for regulators to work together to develop the talent pool.

Contributors

We would like to extend our thanks to Stephen Gibson, Chair of the Regulatory Policy Committee who joined Gareth Davies the Auditor and Comptroller General of the National Audit Office to provide the keynote speeches for the event.

We also thank the event panellists:

  • Alan Clamp, Founding Trustee of the Institute of Regulation, and Chief Executive of the Professional Standards Authority (PSA) for Health and Social Care
  • Rhiannon Harries, Director of the Better Regulation Executive, Department for Business and Trade
  • Gavin Knott, Chief Economist, Strategy Economics Research & Net Zero at Ofgem
  • Ruth Kelly, Chief Analyst , National Audit Office.  

Watch the recording

NAO event: Effective regulation in a climate of innovation

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Authors

Matthew Rees

Matthew Rees

Matthew returned to the NAO in 2021 to lead our Commercial Insights team, having previously overseen our work on the government’s corporate finance activities.

His commercial experience spans Big Four audit and valuations, global investment banking and as a non-executive director and audit and risk committee chair in an energy sector consultancy.

In the public sector Matthew has worked on merger and market investigations at the Competition and Markets Authority (CMA) and economic regulation in the telecoms, water, aerospace and defence sectors.

Matthew represents public sector issues as a co-opted member of the Institute of Chartered Accountants in England and Wales (ICAEW) Council.

Lilian Ndianefo

Lilian’s work at the NAO has included public sector company audits, audits of government departments, supporting the setting of the Local Audit Code and developing guidance for auditors of local government and NHS bodies.

Before joining the NAO, Lilian had many years of experience managing a large portfolio of corporate multinationals for one of the Big Four audit firms.

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