Thousands more businesses could benefit from more straightforward and consistent regulation, if the Enterprise and Regulatory Reform Bill becomes law. The measures proposed by the Bill would greatly expand the Primary Authority scheme, allowing more businesses which share approaches to compliance to partner with a Primary Authority whilst at the same time targeting Local Authority inspection towards those organisations that are considered high risk.

Whilst this could further transform the culture of regulatory enforcement by Local Authorities, the target of setting up a further 1,000 partnerships as a result of the changes will only materialise if businesses are confident that the proposals will deliver.

What is the Primary Authority Scheme?

The Primary Authority scheme was set up three years ago to improve consistency of Local Authority enforcement of all regulatory compliance. The scheme currently allows a business (which operates in more than one Local Authority area) to form a partnership with a single Local Authority, which then provides robust and reliable advice for other Councils to take into account when carrying out inspections or dealing with non-compliance.

As part of the scheme, the Primary Authority could also draw up an inspection plan for a regulated business. Such plans were intended to highlight to other Local Authorities where inspection resources would be best concentrated.

How would this change?

Previously, main criticisms of the scheme focused on the following areas:

  • Many businesses which shared approaches to compliance, including trade associations, franchises and supply chains as well as business groups, were ineligible to participate where individually they were not regulated by more than one Local Authority, although they were collectively. This meant that their shared procedures could be challenged many times
  • A business and its Primary Authority could agree to an inspection plan, which was designed to limit burdens and target inspections where needed. However, these plans were not binding; other authorities needed only have regard to them

In response, the Bill aims to extend the scheme to businesses that share an approach to regulatory compliance even where not all of them operate under more than one Local Authority.

As an example, the Government's explanatory notes to the Bill advise that "where members of a trade association are small businesses operating from single stores, they could all be eligible for the Primary Authority scheme if the effect of their arrangements with their trade association meant that they shared an approach to compliance in relation to the same activity with other members operating in different Local Authority areas. Those arrangements might be that the trade association provides its members with regulatory guidance."

What would the proposed changes mean in practice?

  • Firstly, if your business is, for example, part of a trade association or business group that spans more than one Local Authority, it still could benefit (if the Bill is approved) from a consistent regulatory approach if it is a member of a group/association with a Primary Authority agreement
  • Secondly, Primary Authority inspection plans will now be binding, meaning Local Authorities may not deviate without prior consent and Primary Authorities can require feedback to be provided after inspections. The Primary Authority will then be able to judge if recognition should be offered to a business with a good compliance record, which in turn can benefit from fewer inspections. This should encourage better targeted and risk-based inspections

What can be expected for the future?

It remains to be seen whether greater transparency and consistency of enforcement will result from the changes.

The Bill has now begun its passage through Parliament and we will continue to keep you apprised of developments.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.