New plans hailed as the missing link between business and government
By Colin Donald, Business Editor

A new era in the regulation of business designed to give Scotland an international competitive advantage will be unveiled tomorrow when the Regulatory Review Group reveals detailed plans for a "common-sense and flexible" partnership between business and government.

The first annual report by the Regulatory Review Group (RRG), which brings together representatives of business and the trades unions in dialogue with ministers and civil servants, is to be published tomorrow. The report is being hailed as an attempt to "put Scotland at the heart of the better regulation agenda in Europe", and to end the long-standing tension between the private and public sector, stemming from the perception that regulation is, almost by definition, an impediment to business growth.

Professor Russel Griggs, chairman of the CBI's SME council, who has chaired the RRG, told the Sunday Herald that the report marked "the beginning of the end of the era of box-ticking".

He continued: "This is the start of a major cultural shift towards a more flexible system. We are not saying that it will please everyone, or that the changes we are seeking will happen overnight, but the big change is that there is now a great desire from the Scottish government to understand that business must be regulated in a common sense way."

Key among the recommendations of the report is the introduction of shorter and simpler business impact assessments - the tests to which all legislation is subjected - the introduction of "road-testing" of legislation prior to implementation, greater attention to the composition of groups of business consultees, and a new system that will test Westminster regulation against the different practices, legal systems and methods applying to each part of the UK before, rather than after, enactment.

This last requirement will end the perceived anomaly, whereby Westminster-made legislation has to be transposed after enactment to fit the different legal environment of Scotland.

Also included in the report's recommendations is to give the Scottish government the right to make a case in relation to EU-derived legislation directly to Brussels, rather than through a department of the UK government.

Griggs said that the new system will require "strong leadership" from politicians and the civil service to ensure that the desired "culture change" does not "dissipate".

In a statement welcoming the report, John Swinney, Cabinet secretary for finance and sustainable growth, said: "This government's commitment to make Scotland a more competitive place to do business is absolutely clear. At a time of global economic uncertainty it is vital businesses know that government will do all it can to help and not hinder their efforts to grow and become more successful.

"The report demonstrates a more common-sense approach to regulation which recognises the needs of both regulators and business. It is an approach that is distinctive to Scotland and this country's own distinct circumstance. And the recommendations focus on how we can work together better and deliver the right regulatory environment for businesses across Scotland to flourish."

Since its launch earlier this year, the new approach to regulatory reform, whose models include that pioneered by the Canadian province of British Columbia, has been praised by international observers, such as the Centre for European Reform and the Irish Business and Employers Confederation (IBEC), who have singled out its near-revolutionary requirement for bureaucrats to be pro-active in educating themselves in the concerns and potential concerns of businesses.

The report also identifies a skills shortage among regulators and local authorities and recommends that it be addressed.

Niall Stuart, of the Scottish Council for Development and Industry, a participant in the review, said: "It is in no-one's interest to have sloppy or badly thought-out legislation, and this new approach means an end to unintended consequences, and unnecessary form-filling. It's about legislation achieving its aims with the least amount of disruption to employers and employees.

"In a small country like Scotland it must surely be easier to join up different regulatory bodies, business and government and the unions to make sure legislation achieves its aims. It's very easy for business to blame its problems on red tape, but now it has an avenue to raise concerns, to talk directly to the regulators and get things sorted.

"It's good to see ministers taking responsibility for ensuring that we have the optimum regulatory environment in Scotland and the onus is now on business to come forward if they are unhappy. Now there is an avenue to talk about specific concerns at the highest level the culture of complaint is over."

The regulatory review group also includes representatives of the Institute of Chartered Accountants of Scotland, CBI Scotland, the Office of Fair Trading, the Federation of Small Businesses in Scotland, the Scottish Consumer Council and the National Farmers' Union of Scotland.