Institute of Regulation and Deloitte recently hosted a roundtable exploring the Artificial Intelligence (AI), today’s hot issue. Participants to the roundtable, regulatory experts and professionals were posed three question:

1) How can UK regulators do what is required and being asked of them?

2) AI not only crosses regulatory domains but national boundaries, how can regulators overcome this to work collaboratively?

3) How can AI be leveraged to improve regulatory outcomes?

As emerged from the discussion, AI has a significant impact on regulators and regulation. With the rapid advancement of AI technology, regulators are faced with the challenge of understanding and keeping up with the complex algorithms and systems that power AI applications. They must grapple with developing appropriate regulations to ensure ethical and responsible use of AI while also fostering innovation and improving their effectiveness and efficiency. There is a blurring of sector lines also emerging, with AI often resulting in the oversight of regulators of different sectors focusing on similar issues, creating a need for regulators to collaborate and cooperate, perhaps more than they have ever had to before.

For slides and additional resources:

Discussing the Impact of AI on UK Regulators FINAL.pdf

Government is currently carrying out a short (8-week) consultation, setting out high level principles for the proposed regulation of listed non-surgical cosmetic procedures in England.

The consultation proposes a risk-based system, with local authority licensing required as a minimum for procedures presenting lower risks. For medium-risk procedures (such as the injection of toxins), oversight by a regulated healthcare professional is proposed alongside local authority licensing. Procedures with the highest risk of complications are proposed to be restricted to appropriately qualified and regulated healthcare professionals working from CQC-registered premises.

A number of stakeholders, including regulators and professional bodies, have been monitoring this area and active for some years on the need to improve public safety in relation to ‘high-street’ cosmetic procedures. Government has worked closely with stakeholders in developing the list of restricted procedures; proposals have the potential to significantly reduce public harm.

As these proposals are considered further and worked into detailed regulations, it will be important to ensure that any new regulatory arrangements are properly resourced, and for government to continue to consult further and work closely with cosmetic practitioners, service users and regulators to ensure a smooth and effective introduction.

The consultation will close on 28^th October 2023.

For more information, please see the UK Government press release here: https://www.gov.uk/government/news/consultation-launched-into-unregulated-cosmetic-procedures and the consultation here: https://www.gov.uk/government/consultations/licensing-of-non-surgical-cosmetic-procedures

A public consultation launched on Wednesday 13 September, on proposals to reform the Provision of Services Regulations 2009 (Retained EU Law). The consultation will be open for 8 weeks and the Department for Business and Trade (DBT) would welcome your views to inform the Government’s policy development by Tuesday 7 November. DBT will be hosting webinars on the legislation and the proposed reforms from w/c 2 October onwards.

Who DBT want to hear from: The Regulations apply to competent authorities e.g., local authorities and regulators) and service providers UK-wide and across the economy, with the exception of 11 specified types of service activity. Services covered by the Regulations are wide-ranging, including professional services and other commercial services, and may apply to businesses or to individuals. We therefore want to hear from a range of competent authorities and service providers. Examples of services/activities covered by authorisation schemes include, serving alcohol, managing waste disposal, or practising as a solicitor.

 Aims for the consultation: DBT are seeking the following information:

• Your views on the proposals set out in the consultation document, as well as the practicalities, impacts, potential costs, and benefits of the proposed new provisions.
• Information about general awareness of the Regulations within the UK services sector.

Background: The Provision of Services Regulations 2009 (“the Regulations”) transposed the EU Services Directive into UK law, and so are Retained EU Law. The Regulations provide a framework of rules for how services are regulated in the UK. In particular, they ensure that authorisation schemes (e.g., schemes concerning licences that businesses or individuals must secure before providing a service) which are administered by competent authorities are proportionate, justified in the public interest, and conducted in a fair, accessible and transparent way for businesses.

DBT intends to take advantage of the powers provided in the Retained EU Law (Revocation and Reform) Act 2023 to improve these Regulations. Our aim is to deliver a package of reforms which ensure that the Regulations better meet the needs of UK businesses, by reducing regulatory burdens and supporting the UK’s ambitious trade agenda.   The proposed reforms also support the Government’s wider Smarter Regulation programme and efforts to grow the economy by creating a more streamlined, innovative, and agile regulatory regime for services.

Evidence from an independent Evaluation of the Regulations, conducted in 2022, indicated that there is an appetite for amending the Regulations among both service providers and competent authorities.

Next steps: Please do consider and respond to this DBT consultation. DBT recommend working with legal colleagues on your response to the consultation. DBT also welcome you sharing our consultation with any other interested parties.

DBT’s preference is for responses to come through the Qualtrics survey. Alternatively, you can email the response form found on the consultation page to servicesregulations@businessandtrade.gov.uk. The deadline for responding to the consultation is 11.59pm on 7 November.

If you would like to find out more about the Regulations and the consultation before responding, DBT will be holding webinars on the legislation and the proposed reforms from w/c 2 October. Please email services.regulations@businessandtrade.gov.uk ASAP if you are interested in attending a webinar.

On 22 September, Parliament’s Public Accounts Committee published a report on Regulation After Brexit. The report is clear that EU Exit has had a significant impact on UK regulators who have taken on new and expanded roles. But the development of long-term regulatory strategies post-EU Exit has been slow, and the future direction of regulation remains unclear.

Regulators are facing challenges in accessing the skills they need to regulate effectively, including vets to monitor food safety and animal welfare in abattoirs, toxicologists to assess food risks and chemical safety, and lawyers and economists to enforce competition law and protect consumers. And many regulators have also been asked to cut budgets and staff, and lost access to data sharing arrangements with the EU, all making current regulatory models unsustainable. There are risks that regulatory divergence between the EU and UK may make regulation less efficient and more costly for regulators, consumers and businesses, though there are opportunities too.

The Institute of Regulation has good links with professional bodies for regulators in other countries, particularly in Australia and New Zealand. In the US, we are in contact with CLEAR, the Council on Licensure, Enforcement and Regulation. Their role, like ours, is to be a forum for improving the quality and understanding of regulation.

You can check out their podcasts and other material on their website.

The hottest day in British history was not one to celebrate: school closures, fires, transport disruption, yet more pressure on the NHS. July 19 2022 was a clear reminder, if we needed one, that climate change is not conceptual nor theoretical but real and tangible. Its effect on our lives is felt now.

So, what does that mean for us as regulators – particularly those with stretched resources, competing priorities and limited in-house expertise and knowledge in relation to sustainability? That was the topic of the day at the Institute of Regulation’s first ever roundtable event, hosted by PA Consulting in London on 29 June.

It’s always powerful when regulators, from all our different domains, get together. In fact, that is the fundamental premise of the new Institute itself: that together we are better, more insightful and more able to grapple effectively with the challenges on each of our desks.

I’m grateful to colleagues from the Equalities and Human Rights Commission, the Care Quality Commission, Ofcom, Civil Aviation Authority, Professional Standards Authority, Medicines and Healthcare Products Regulatory Agency, North Sea Transition Authority, and the Food Standards Agency – along with our hosts PA Consulting – each of whom shared experiences, what they’re doing so far to tackle the sustainability challenge and lessons for us all to learn. Here are four takeaway reflections from the discussion:

1. Sustainability is on the agenda for us all

Very few regulators have statutory footings that explicitly address issues of sustainability, yet it’s clear it’s on the agenda for us all.  Stakeholders rightly expect that the care industry is not frivolous in its use of resources; that our food is produced not only safely, but sustainably; that the future of aviation is getting serious about emissions.

In fact, we heard that many regulators are choosing to be proactive, driving the sustainability agenda in their industry irrespective of whether it is mentioned explicitly in statutory mandates. The MHRA, for example, is looking at how to play its part in reducing the NHS’s carbon emissions from medicines and medical devices. In response to these new areas of work, some regulators are choosing to recruit in new skills or work with external partners to secure the necessary expertise and experience.

2. Taking the broader view

Reducing carbon is important. But it’s not the whole picture. Regulators are optimally placed to make serious, long-term contributions across the full range of all 17 United Nations Sustainable Development Goals. Some regulators are already taking steps in this direction. The EHRC is beginning to consider the equalities impacts of a shift to a sustainable economy.

3. Shining a light

Within our distinct domains, the voice of the regulator holds weight. When regulators comment on the extent of sustainable practice in the industries we regulate, stakeholders can and do trust what we say. We can shine a light on good practice, to expose poor practice, and so to provoke change and have real impact.  Just using our voice, just shining a light is a significant regulatory tool for change.  We at Ofqual are considering how we can deploy our position in the industry to highlight good sustainability practice and raise the bar across the qualifications industry.

4. Measurement is key

Though carbon may not be the whole picture, it is a part of it. Yet at present there is no one single, consistent standard for the measurement of carbon emissions in the UK. This will become increasingly important for regulators if those we regulate, and their customers, are to have confidence in the information they collect and receive about environmental impact. Ofcom is grappling with this question of how its regulated sectors can measure and maximise the enabling role of digital communications to decarbonise (commonly referred to as scope 4) for which there is no agreed methodology. There is significant opportunity for government and regulators to work together to establish consistent measurement standards to unlock reliable information for consumers and industry alike.

Future opportunities for regulators to work together

The Institute of Regulation wants to establish a special interest group specifically on sustainability and regulation. It will be a forum to take forward these discussions and open them to all members of the Institute. Please contact us if you would be willing to participate in such a group.

Michael Hanton, Director, Institute of Regulation & Executive Director Strategy, Ofqual

On 29 September, our trustee Marcial Boo spoke at RegTech; a conference at Australia House in London about the use of technology in regulation. He argued that regulators are responsible for overseeing complex systems that are getting ever more complex as sectors develop and society globalises.

In addition, many regulators are relatively young, often having been set up in the last 20 years, so they have so far understandably focused on their core business and on embedding their regulatory framework in the sectors they oversee.

This means that technology presents an under-exploited opportunity to deliver the tools to help regulators manage the growing complexity of their regulatory burdens. A more detailed blog about his speech is here.

A letter to Conservative leadership candidates from legal, environmental, medical and equality organisations, coordinated by Unchecked, urged the new Prime Minister to support regulation. They said: “The UK has always been at the forefront of having strong protections and common-sense regulations.

These protections are the invisible safety net that holds together our society and provides stability for the UK … and they create a level playing field that allows businesses to grow and thrive”.

For an unusual regulatory issue, have a look at this article from The Economist. It was once forbidden to sell home-made food for profit in America. But regulations changed during Covid. Looser rules encouraged more people to start cottage-food operations – New York state saw 1,538 new home-producers registered in 2020, up from 986 in 2019.

But things went wrong, with cases of exploding bottles of unregulated ‘pink sauce’ in Florida reported to the US Food and Drug Administration. Sometimes regulation is worth it...

On the 8th August, the think tank Policy Exchange published its report ‘Re-engineering Regulation. It argues that regulation is vital to the UK, and that, post-Brexit, we have “a unique opportunity to streamline and modernise regulation to deliver the high environmental and social standards citizens desire, while also giving the British economy the competitive edge it needs”. Its recommendations will give regulators much to discuss.