UK Government lays out plans to free firms from 10 billion pounds of heavy handed over regulation
10/03/2016« Back

The results of a series of Government reviews aimed at addressing the confusion and burden placed on businesses by the regulatory and policy framework governing the energy sector has been published.

The aim of the Government “Cutting Red Tape Review” was to seek the opinions of businesses affected by regulatory legislation (and its implementation), with the objective of delivering its commitment to cut “£10 billion of heavy-handed over-regulation”*

What were the review findings?

After consultation with scores of companies, the review (run jointly by the Cabinet Office, Department for Business, Innovation and Skills, Department of Energy and Climate Change and Ofgem) produced several key findings affecting the energy regulatory landscape.

  • Regulation and enforcement isn’t specific enough, or is designed in a way which doesn’t consider the range of businesses and business models they affect – leading to unnecessary burdens

  • Data Reporting is too frequent, overlapping and can be too onerous. (reference to the like of the CRC Energy Efficiency Scheme [CRC], Energy Savings Opportunity Scheme [ESOS] the Climate Change Levy [CCL]

  • Adhering to the required legislation, codes and rules can be burdensome because they are difficult to locate, expensively governed, and sometimes contradictory.

  • The scale of change and lack of clear direction from Ofgem and the Department of Energy and Climate Change (DECC) has led to significant opportunity costs and lost investment.

So what happens next?

After taking on board the points raised from the review, the Government has made further commitments to;

  • Produce a longer term narrative with a clear approach to policy, which considers the breadth of the market, producing a clearer energy sector policy approach by the end of 2016.

  • A more joined up approach, with DECC & Ofgem forming a “Working Group” to deliver a more streamlined and shared approach to data and information requests by Summer 2016.

  • Adopting a risk based approach to compliance by simplifying processes and rules to regulation, one consideration being for businesses to face a single domestic energy tax and reporting framework (with the exception of the EU Emissions Trading Scheme) ,a review which it aims to complete by Spring 2016.

*Speaking at the BCC annual conference, Business Secretary Sajid Javid said: "This government is delivering on its commitment to free firms from £10 billion of heavy-handed over-regulation and build a more productive Britain. Hundreds of businesses responded to our Cutting Red Tape reviews and we are taking decisive action based on their experiences."

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