Watching the watchers: New inquiry into independence and accountability of UK regulators

According to the Department for Business and Trade, there are 90 regulators across the UK, not including local authorities. They cover a wide range of areas and have a range of different powers and responsibilities.  Most are funded by the taxpayer.

To date, the Industry and Regulators Select Committee has scrutinised of a number of regulators, including Ofwat, Ofgem, and the Office for Students due to concerns being raised about their effectiveness, eg with water leaks, pollution of waterways and energy price increases. The Committee is now launching an inquiry focusing on the relationship between regulators and the UK government, and on how regulators are held accountable, including by the UK parliament.

The Committee is interested in answers to the following questions:

1) Are UK regulators being given a clear job to do?

2) Is the right balance being struck between the responsibilities of regulators and those of the government, particularly where there are political or distributional trade-offs that need to be resolved?

3) Are regulators appropriately independent of government? Is the right balance being struck between strategic and political input from government and preserving the operational independence of the regulators?

4) Does the government provide too much or too little guidance to regulators in making decisions, particularly in deciding between different objectives and priorities?

5) Are the roles and remits of different regulators sufficiently discrete, or is there overlap and duplication?

6) How effectively do regulators co-operate with one another, and how could this be improved?

7) Do the UK’s regulators have the necessary skills, capabilities and expertise internally to perform the roles they have been given? If they do not, how could this be improved?

8) Who should hold the regulators accountable for their performance against their objectives? What is the appropriate role of parliament in performing this scrutiny role?

9) How should the government and the regulators themselves facilitate appropriate scrutiny and accountability of regulators? Are regulators sufficiently transparent about their own performance?

10) What mechanisms and metrics could be used to hold regulators accountable on a regular and ongoing basis and to judge whether a regulator is performing well?

11) Do any of the UK’s international comparators address the above questions particularly well? What lessons, if any, can the UK learn from other jurisdictions on these matters?

For this inquiry, the Committee is focussing specifically on regulators which a) have a statutory role established by the UK parliament and b) are organised as public bodies. The Committee invites contributions to its inquiry by 1 December 2023 and aims to report to the House in the new year.

Although Select Committees do not have any significant power, and the government of the day can ignore their findings and recommendations, they do require the government to respond, and can also lead to publicity for certain issues.  A review of the role of regulators may influence government policy, as well as possibly encouraging some bodies to make changes to the way they operate, within the confines of their remits.  Some regulators already work together where there are overlaps - an example is the Digital Regulation Cooperation Forum, which consists of the ICO, CMA, Ofcom and FCA.  There had been concerns that the CMA and ICO sometimes pull in separate directions when it comes to competition and data protection regulation.

Another issue which has arisen is in relation to the independence of the ICO in the draft Data Protection and Digital Information Bill (no 2), which is currently at report stage in the House of Commons.