Public Management Reform and the Regulation of Private Business: Risk-Driven, Customer-Centric, and All Joined-Up?

Abstract

This article considers the impacts on the public regulation of private business of three key transformations in public management: “towards more targeting of resources” (through more risk-based regulation); “towards a stronger service ethos” (through more customer-centricity); and “towards increased integration” (through more joined-up regulatory organization). Empirical evidence is presented from a program of research focusing on local authority regulation of the businesses sector in England and Wales. The article concludes by reflecting on how such transformations, which are of wide international significance, might be viewed, particularly from a public interest perspective.

Keywords:

• public regulation
• local government
• risk management
• business regulation

Notes

¹Evidently, any number of intermediate “positions” could be envisaged besides those captured in Table 1, but for the purpose of clarity and simplicity, we have highlighted just eight here.

²This research was sponsored by the Local Better Regulation Office, now part of the Department for Business, but previously established as a non-departmental public body to promote improved regulatory practices in local government in England and Wales.

³These were selected to be representative of the total of 2,300 retail businesses registered on the Council's Public Protection Management database, which is estimated to contain between 90 and 95 percent of the County's commercial establishments.

⁴In England and Wales, the collective budget for “environmental health regulation” was cut by 7.7 percent in 2011–12 compared with the previous year (from £597.7million to £551.7million), while that for “trading standards/consumer protection” was reduced by 11.0 percent (from £196.0million to £174.5million) according to statistics from the Local Better Regulation Office (2011). Moreover, cuts of equivalent magnitude were again implemented in 2012–13 and further rounds were envisaged for 2013–14 and probably beyond as well.

⁵Many local authority regulators had also followed the police in adopting a “problem-solving approach” (in their case, to regulatory compliance problems) using a variant of the “National Intelligence Model” (NIM) developed by the police. This had been designed to manage police intelligence in a systematic manner so as to be able to assist in deciding priorities and the deployment of resources according to sets of rules and principles (Maguire & John, 2006)

⁶The key risk assessment models used by local authority regulators are as follows:

•	The Health and Safety Executive/Local Authorities Enforcement Liaison Committee (HELA) Priority Planning system;
•	The Office of Fair Trading (OFT) Trading Standards Risk Assessment Scheme;
•	The Food Standards Agency (FSA) Food Hygiene Intervention Rating Scheme
•	The FSA Food Standards Intervention Rating Scheme
•	The FSA Primary Production Hygiene Risk Assessment Scheme;
•	The FSA Animal Feed Law Inspection Rating System
•	The Department for the Environment, Food and Rural Affairs (DEFRA) Local Authority Integrated Pollution Prevention and Control (LA-IPPC)
•	The Local Authority Pollution Prevention and Control (LAPPC) Risk Method
•	The DEFRA Animal Health and Welfare Risk Assessment Scheme

⁷For each of these LBRO proposed a four-point measurement scale (of high, medium, low, or very low).

⁸See also Lynch-Wood and Williamson (2007).

⁹See also Braithwaite (2000); Black (2002); Braithwaite (2002); Yeung (2004); Baldwin & Black (2008); Black (2008); Braithwaite (2008); Black & Baldwin (2010) and Black & Baldwin, 2012).

¹⁰ Lynch-Wood and Williamson (2010) also highlighted the notion of “beyond compliance,” if businesses operated to standards exceeding those required by the regulations.

¹¹In this respect, for example, and focusing on environmental regulation, Whyte (2010) compares the 1,550 or so frontline officers employed in the UK by the Environment Agency, with the 15,000 or so Police Community Support Officers (PCSOs) who have been employed by UK police forces in recent years. See also Gunningham and Johnstone (1999); and Gunningham, Kagan, and Thornton (2004).

¹²By this Whyte (2010) has referred, for example, to a business with ongoing compliance difficulties finding it difficult to attract good staff and therefore under-performing and ultimately failing in economic terms.

¹³See also Tombs and Whyte (2006).

¹⁴The remaining 11 percent indicated that they perceive the department as “predominantly an enforcement agency.”

¹⁵The case study particularly highlighted the empathy of the regulators towards the economic and social pressures facing several of the livestock farmers in their area, and recognition of the problem of clinical depression afflicting many such farmers as a result of long periods of isolation as well as poor financial returns.

¹⁶Reorganisations in a few councils have led to the creation of single “enforcement services” units or “regulatory services” departments (note, once again, the use of the term “service” here as symptomatic of the transformation discussed in the preceding section).

¹⁷In Wales, and indeed, in England's larger metropolitan areas, local government has been re-organized over the past 25 years into “unitary authorities “with a single council responsible for all the main services in each such area.

¹⁸The Worcestershire Regulatory Service is a shared service (headed by its own chief officer accountable to a governing body comprising elected representatives of all the constituent councils and being responsible for the business-related activities of animal health, consumer protection, fair trading, food safety, health and safety at work, licensing, pollution and nuisance, and metrology and illegal trading, as well as providing consumer advice, and dog warden and pest control services to residents across the county.

¹⁹The information supplied by the local authorities covered all formally recorded interactions (i.e., recorded on the local authority's regulatory activity database, and while dominated by routine inspection visits by regulators to particular business premises, also included information on a range of other regulation-related interactions, for example, on special visits (for example, in response to complaints received from members of the public), telephone conversations from/to particular businesses, and emails and other written correspondence. Each sample comprised between 100 and 150 businesses which were selected by a stratified random sampling process based on six key business-type categories as follows: Agriculture, Manufacturing, Construction, Wholesale & Retail, Transport & Storage, and Accommodation.

²⁰In her book Systems of Survival, Jacobs (1992) distinguishes between the “Guardian” and “Commercial” moral syndromes