My Lords, Clause 60 strengthens primary authority inspection plans. Its effect is to make it binding for local authorities to act in accordance with a plan which is in force. Strengthening inspection plans in this way is a crucial measure for the Government’s aim of,
“ending the culture of ‘tick-box’ regulation”.
Under the current provisions, primary authorities and businesses can work together to establish an inspection plan. Several businesses have done so, and report more informed and better-targeted enforcement as a result. As things stand, local authorities must have regard only to plans, and are not bound by them. We have been told by primary authorities that plans and requests for feedback are not being followed in many cases. This means that the full benefits of inspection plans
are not being realised, and many businesses are put off developing them because they do not have confidence that they will be followed.
With this clause, it is our intention to remedy this problem and to improve inspection plans. We are giving them the teeth that they need to deliver as much benefit for businesses as possible. This will ensure that businesses and primary authorities have certainty that inspections will be carried out in accordance with the plans in which they have invested. It will also mean that essential, timely feedback is received to keep the business informed of its key risks. Inspection plans are a crucial tool in enabling businesses to earn recognition for their compliance procedures and to reduce the burden of regulation. They also allow firms to focus on the key risks to their business and optimise their procedures, saving valuable time and wasted effort and allowing them to provide a better service to their customers.
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In turn, this allows more focus to be placed on growth and the creation of jobs. A business with an inspection plan is informed about where its risks lie. It knows where attention needs to be focused and can plan accordingly. Management time does not need to be taken up with repetitive requests for information and unnecessary regulatory activity. John Lewis certainly agrees. Its compliance and food safety manager says that its inspection plan leads to,
“more relevant, risk based inspections at branch level and cuts out the duplication of time spent with inspectors in each branch looking at centrally produced information such as the food safety management system”.
The changes enacted by Clause 60 will give rise to the next generation of inspection plans. The enhancements will mean that existing plans will reach their full delivery potential because all local authorities will inspect in line with the plan and there will be an increased flow of important information following inspections. Importantly, the changes will maximise the number of businesses that decide to develop a plan. The value for them will be much more clearly defined. It is little surprise then, that Iceland Foods’ health and safety manager welcomes the change:
“Plans to make the Inspection Plan more binding on regulators would be welcomed as this will provide further opportunity to receive feedback on compliance levels in areas of particular interest”.
Clause 60 delivers improvements in the enforcement of regulation exactly where businesses need them most—by allowing them to focus their precious resource on key risks. Of course, concerns have been raised about this clause. The Local Government Association and others have questioned whether strengthening inspection plans reduces local authority autonomy and undermines regulatory protection. I listened carefully to the words expressed by the noble Baroness, Lady Greengross. I assure the Committee that we have thought about both of these points and believe that neither localism nor consumer protections will be compromised.
First, inspection plans can assist local authorities to plan their work with a business in advance as well as target inspections according to risk, meaning that
resources can be better directed towards compliance problems. Hertfordshire County Council is one of many that support this view. Its representative stated:
“The partners are looking to use inspection plans to better target and coordinate regulatory activity to the benefit of business and local authorities. This will have the effect of avoiding duplication and freeing up local authority regulators time to target other priority areas for enforcement”.
The freedom of authorities to respond to complaints or specific intelligence about non-compliance that they receive is unchanged by this clause; inspection plans apply only to routine activity, such as scheduled inspections. That is made clear in the statutory guidance. Supporting this view, the British Retail Consortium, when appearing in front of the Committee in the other place said:
“That then leaves the individual local authority that is not the primary authority free to look at complaint-driven aspects and other things, and I would say that that supports localism rather than erodes it”.—[Official Report, Commons, Enterprise and Regulatory Reform Bill Committee, 21/6/12; col. 124.]
Protecting consumers is at the heart of a risk-based approach to enforcement. Enhanced understanding of the business and its compliance procedures means that the inspections can focus on areas where risks are posed, so increasing the quality of protection they are able to deliver. Consumer protections are also enhanced as a result of a business developing a plan and receiving feedback from it. The insight gained on compliance procedures and their operation allows improvements to be made quickly, as needed.
In conclusion, inspection plans are an essential mechanism for reducing the burden of regulation. They allow a business which already enjoys a productive relationship with a primary authority to focus its resources according to risk and minimise wasted effort. The clause will encourage more businesses to work towards earned recognition of their compliance procedures, thereby saving time and effort. It will also increase the impact of existing plans. This will ultimately free business resource for growth, and enhance protection for consumers.
I hope that I have gone some way to answering the questions and concerns raised by the noble Baroness, Lady Greengross. On the issue that she raised about direction or otherwise from central government, inspection plans are written by local authorities for local authorities. Central government’s role is simply in creating a framework for that scheme.
The noble Baroness also questioned the evidence for change in relation to inspection plans. The data from businesses and primary authorities with inspection plans already in place indicates that a significant number of inspections are occurring that do not follow the plans and that feedback is not always provided following an inspection, even when it is requested. In a recent evaluation of the primary authority scheme one business said that of 28 inspections carried out, only four adhered to its inspection plan. A further business said that it had no fewer than 341 inspections and that only 53 resulted in feedback, despite it being requested in its inspection plan.
Finally, the noble Baroness raised the question of whether binding inspection plans add a particular burden to local authorities. The answer is no, and that
inspecting in accordance with inspection plans will reduce burdens for local authorities by assisting them to prepare for inspections and indicating which areas of the business require inspection, thereby saving time. Inspection plans may also reduce the need for inspections, thereby saving effort. I commend the clause to the Committee.