In the context of regulation, the 'necessity' principle is about ensuring regulatory policies and tools are deployed only when required and that the need for particular regulatory institutions is kept under regular review.

In terms of regulatory institutions - including central Government agencies, local authorities and sectoral regulatory institutions - ongoing monitoring and review of optimum structures are important. Technological advances, economic necessities or political priorities can all quickly change the rationale for particular regulatory structures. In such cases, the continued necessity and appropriateness of regulation, and the need for specific regulatory institutions and their mandates, must be reviewed and adjusted as appropriate.

In terms of assessing the need for regulation in an economic context, it is important to assess carefully whether or not the existing situation can be resolved through market mechanisms. Clear criteria should be used to determine whether circumstances justify regulation of particular markets.

Direct intervention by Government always requires careful consideration. The State should avoid the "regulatory impulse" whereby it adopts programmed, default responses to situations that arise, to the exclusion of other possible solutions.

It is also important to be clear about an objective before considering whether intervention will ensure the intended result or be outweighed by the unintended consequences. To this end, an evidence-based approach should be adopted to policy-making in general and to the regulatory process in particular.

Is the regulation necessary?

We will require higher standards of evidence before regulating

The decision to make a regulation is an important one and it will always have implications. The extent of these implications may not always be clear. In the case of regulations which affect particular markets, the implications can be far-reaching. In the future, we will require regulations to be more rigourously supported in terms of the information, analysis and assumptions that underpin them. This will be done partly through specific techniques such as impact assessment but also through strengthening capacity within Government Departments to produce evidence-based policy options. It will also require ensuring that data are available to allow proper rigorous analyses. A more favourable climate for evidence-based policy will be created within Government, through training and awareness-raising, and development of policy tools and techniques such as scenario planning and option generation.

There is already a discernible shift towards evidence-based policy. We see it, for example, in terms of evaluative programmes such as expenditure reviews, greater use of research in the social sciences and policy proofing tools to underpin key policy objectives, e.g. reducing poverty and promoting gender equality.

A recently published report by the National Statistics Board - "Developing Irish Social and Equality Statistics to meet Policy Needs" ¹ - underlines this trend. On foot of this report, Departments are working with the Central Statistics Office (CSO) to identify the potential for integrating and cross-referencing data across the system. This ongoing work will add to the range and quality of available data.

The evidence-based approach seeks to answer questions such as "What works? In what context did it work? What did it take to make it work? How would it work better?" This approach has a lot in common with other results-oriented approaches to public service delivery, such as quality customer service and the value-for-money approach to financial management.

Regulations are the legal expression of policy choices. However, policy outcomes can be influenced by the decision to use a regulation as the means of implementing the policy as well as by the quality of the regulation itself. This means that, before regulating, we must assess the evidence to determine if regulation is the correct option. Strengthening the evidence base for regulation will, in turn, add to the demand for good quality data. It will raise questions as to the availability and sufficiency of such data and it will have implications for the capacity of the system to produce and use this kind of information.

Of course, regulation can also be a positive force and the decision may be quite clear-cut in certain circumstances. There are many examples of this, related to environmental, health and safety and consumer protection. Nothing in this document will affect these decisions except that we will wish to have the decision supported by clearer evidence. The key test here is that there must be demonstrable benefits in terms of achieving public policy objectives flowing from regulation that would not otherwise accrue.

To sum up: To ensure that regulations are necessary, the Government will:

Strengthen capacity for evidence-based policy-making [Action 2.2.1];
Improve the quality of information to support evidence-based policy [Action 2.2.2];
Use Regulatory Impact Analysis [Action 2.1.1];
Examine where regulation may be hampering competition, including through further reviews of sectors by the Competition Authority [Actions 3.2.2-3.2.3].
Develop competencies through the Performance Management and Development System (PMDS) [Action 2.2.3];
Recruit specialist staff with relevant competencies, where appropriate [Action 2.2.4];

Can we make it easier and simpler?

We will reduce red tape

We are all familiar with red tape. It arises from cumbersome administrative procedures, unclear communications, excessive information demands or complicated approval processes. Red tape is irritating and frustrating but it is also costly. It is a financial drain for those who have to comply with it but also for those who have to administer it. Often, public service organisations are their own worst enemy in this area because they tie up their own operations in excessive administrative procedure.

A lot has been done already to improve things. Government Departments and agencies are much more customer focused than they were ten years ago. Customer service principles underpin many of the schemes and services that we offer to the public. However, we need to go further. We need to design quality and efficiency into our new services and we need to review and overhaul our existing ones. Using existing structures and initiatives for improving customer service within the public service, we will begin to make further inroads in this area. Information Technology will continue to play its part. e-Government has great potential to streamline delivery of services and we will continue to work to harness its full benefits.

We are planning to make it possible to access an increasing amount of public services using modern technology, reducing the need for form-filling and making services faster and more accessible. The intention is to virtually integrate public services so that they will be accessible at a single point. Access to services will be provided through a number of channels, such as the internet, one-stop shops, mobile phones etc. Accessing public services through the "Public Services Broker" (also referred to as the e-Broker) is likely to be another option for accessing services.

Such accessibility would have many advantages, including:

Public services would be accessed more easily, 24 hours a day, 7 days a week;
There would be less form-filling - the same information need not be given again to different offices or agencies;
Progress of applications could be tracked more easily by the applicant; and
It would be possible to have faster and more efficient processing and service than provided by traditional access routes.

Departments are currently preparing customer charters which will set down service commitments following consultation with their customers. Arising from this consultation and to help mainstream Quality Customer Service (QCS), all Departments will be asked to identify opportunities to simplify and streamline how they interact with their customers, including reductions in red tape. Departments will be required to report on progress in their annual reports.

The burden of red tape from existing regulation will be reduced through programmes under the direction of the Statute Law Revision Unit in the Office of the Attorney General. Some work is already under way. For example, a review is being undertaken of all pre-1922 legislation. This review will identify outdated legislation that is in need of repeal, revision or re-enactment. It will also remove anomalies. In addition, statute law revision tools will contribute to the process of systematically reviewing regulation with a view to identifying the potential for simplification.

To sum up: In terms of getting rid of unnecessary red tape, the Government will:

Streamline service delivery and administrative processes including through further development of initiatives in e-Government and Quality Customer Service (e.g. customers charters). [Actions 1.6.1, 1.9.1];
Introduce sectoral regulatory reviews - systematic reviews of regulation covering key areas within the economy and society [Actions 3.1.1-3.1.3];
Use Statute Law Revision processes to tackle red tape imposed by existing regulation [Actions 1.1.1; 1.7.1-1.7.2].

Are our rules and structures in this area still valid?

We will keep our regulatory institutions and framework under review

When all the rule-making and enforcement agencies are taken into account, the regulatory landscape in Ireland seems quite crowded. We need, therefore, to ensure that the potential for fragmentation and duplication is minimised. Such fragmentation and overlap may be horizontal in terms of the scope of coverage of regulatory functions across the sectors. There may also be vertical fragmentation or overlap in terms of the accountability chain and precise reporting arrangements in place.

Ongoing review of the regulatory framework can help ensure that the range of regulatory institutions is optimal and that the accountability mechanisms are comprehensive. In cases where the rationale for establishing an independent sectoral regulatory body is to facilitate a sector's transition to the open market, the need for regulation ought to diminish in line with the development of competition in the sector. As competition develops, it may therefore be possible to roll back the sector-specific regulatory constraints and allow market forces and the general rules of competition law to prevail.

In addition, technological developments generate considerable change that impacts on products and markets, for example, through technological convergence. This obliges us to ensure that our regulatory structures are up to date and relevant. Regular review can also help establish whether the split between the role of Government as policy-maker and regulator, which is often mirrored in the split of functions between central Government and independent sectoral regulators, is being handled effectively.

Review of this nature is part of the policy function of Government Departments. It can also be helpful to have an independent, objective assessment of such arrangements, and opportunities will be sought to benchmark Ireland's regulatory regime and progress on regulatory reform at international level, including through the OECD.

A further review mechanism will be a system of sectoral regulatory reviews whereby sectors of the economy are examined on a regular basis in order to establish the viability of current regulatory approaches, including the roles of sectoral regulators.

Such reviews could be initiated by the Government, by the relevant Minister, or on the recommendation of the Better Regulation Group (BRG) based on its analysis of developments in particular sectors or in overall regulatory policy. It will be open to the BRG to organise the reviews itself in certain circumstances.

In addition to sectoral regulatory reviews, the role and resources of the Competition Authority and the Office of the Director of Consumer Affairs will be reviewed periodically to ensure their ongoing effectiveness.

To sum up: In terms of keeping the necessity of regulatory structures under review, the Government will:

Systematically review regulation in key areas and sectors [Actions 3.1.1-3.1.3];
Establish a new Better Regulation Group [Action 3.3.1];
Produce an audit of the regulatory framework which will map out the various rule-making and enforcement bodies and reporting arrangements. [Action 3.4.2].
Benchmark Ireland's regulatory regime at international level, including through the OECD [Action 3.4.1];
Review the role and resources of the Competition Authority and the Office of the Director of Consumer Affairs [Actions 3.2.2, 3.3.2];

IMPORTANCE OF COMPETITION

Competition is a positive force for creating jobs and promoting economic growth. Competition policy has a major role to play in generating continued improvements in living standards and overall economic welfare.

In a small open economy like Ireland's, greater competition in the "sheltered" (non-traded) sectors of the economy can result in lower costs to firms in the traded sector, making them more competitive internationally and resulting in higher employment. In part, this will be achieved through the continued refinement and active implementation of competition policy.

The role of the Competition Authority is crucial in this regard. The Authority's work, especially its studies of particular markets and sectors (e.g. the study of the professions initiated in 2001) are an important input to, and a trigger for, regulatory reform. In addition to those studies already undertaken by the Competition Authority, further studies will be commissioned across a range of topics/sheltered sectors of the economy.

RED TAPE AND SMALL ENTERPRISES

For small businesses, red tape can be especially onerous because they do not have the staff resources to deal with it. It has been estimated that in a small firm employing just 8 people, 50% of one person's time will be spent on form filling. When we think of how important the small and medium businesses are to our economy, we can immediately see how red tape can erode competitiveness.

REGULATORY BODIES IN IRELAND

There are over 500 public agencies/bodies in Ireland, many of which have a regulatory function - either as a rule-maker or rule-enforcer. For example, each Government Department and Office generates regulation - either as primary or secondary legislation. In addition, there are more than 100 local authorities, including City, County and Town Councils that regulate on a local basis. Currently, there is a small number of independent sectoral regulators including ComReg (communications regulator), the Commission for Aviation Regulation, the Commission for Energy Regulation, and the Irish Financial Services Regulatory Authority (IFSRA). Further regulatory authorities have been mooted, including in the transport sector.

Organisations such as the Office of the Director of Consumer Affairs, and the Competition Authority also have important roles in the enforcement of a wide range of consumer protection and competition law.

There are also many agencies under the aegis of Government Departments that have been delegated regulatory /enforcement functions. Examples of such bodies include the Food Safety Authority and the Censorship of Publications Board.

The Better Regulation Group, to be established as an outcome of this White Paper, will undertake an audit of the regulatory framework in Ireland which will map the various bodies and reporting arrangements in place.

GOVERNANCE AND ACCOUNTABILITY

Sectoral regulation has often been set in the context of a three-part model of State activity: policy-making, service provision and regulation. In certain markets (e.g. energy, public transport, communications), Ministers and their Departments have sometimes engaged in all three activities simultaneously by setting policy for the sector, owning the only service provider and regulating the market.

Recent years, however, have seen a move away from monopoly market structures in cases where these are no longer justified by technologies or by economic or social dynamics, and a move towards an opening of such markets to competition. When a market is liberalised in this manner, it becomes undesirable for a single part of the State (typically a Minister and a Department) to continue to regulate the behaviour of all market players, while owning the dominant such player. One option that has been followed in several instances is to establish an independent economic regulator who takes on responsibility for exercising the regulatory function, within a policy context set by the Minister and Government.

This model was described in Governance and Accountability in the Regulatory Process (Department of Public Enterprise, 2000)² ,and its applicability can be seen in key aspects of the markets for communications, energy, public transport, aviation and others.

¹ National Statistics Board - "Developing Irish Social and Equality Statistics to meet Policy Needs" (2003) (Government of Ireland)

² Governance and Accountability in the Regulatory Process (2000), Department of Public Enterprise

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