UK regulatory system needs urgent reform, says House of Lords

'Who watches the watchdogs?' report published

UK regulatory system needs urgent reform, says House of Lords

Insurance News

By Terry Gangcuangco

“If the integrity and legitimacy of the UK’s regulatory system is to be preserved, the findings and recommendations in our report must be addressed by the government, regulators, and Parliament.”

Those were the words of Lord Hollick (pictured) when the House of Lords industry and regulators committee published its Who watches the watchdogs? Improving the performance, independence, and accountability of UK regulators report.

In a country where there are around 90 regulators, the committee believes an Office for Regulatory Performance should be created as part of the urgent reform that is needed in terms of overseeing UK regulation.

Through its inquiry, the committee found that parliamentary scrutiny of regulators is currently reactive and piecemeal instead of systematic and routine; that there are regulators who depend on the government for funding, impacting their independence; and that regulators face hiring/retaining challenges when it comes to specialised staff.

The committee’s recommendations include allowing Parliament to play a more prominent role in scrutinising appointments to regulators; streamlining regulators’ duties and objectives, with clear guidance on how they should be prioritised; and considering allowing relevant regulators the power to raise their own revenues. 

All conclusions and recommendations are outlined here.

In a release, Lord Hollick said: “Our report raises concerns about the functioning of the three-way relationship between the regulators, the government, and Parliament, particularly the role and performance of regulators, their independence, and their accountability. We are especially concerned at cases where the government has failed to resolve political or distributional questions facing regulators, and instead interfered in their day-to-day workings.

“Independent regulators must have the confidence to tell the government and the public about the serious problems facing their sector and be able to set out proposals to meet them with clarity, efficiency, and transparency.

“Ministers and departments responsible for specific regulators should be subject to scrutiny alongside these regulators. We were therefore disappointed by the limited engagement in our inquiry by the Department for Business and Trade, particularly when transparency and accountability to Parliament were a central theme of our work.”

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