Small Business, Enterprise and Employment Act 2015

Section 18: Power to specify regulatory functions

181. This section sets out the process for specifying regulatory functions and bringing them within the Reviewer’s remit. It provides that the Secretary of State may, by making regulations, specify regulatory functions to which the duty set out in section 17 applies. Subsection (3) permits him to refer either to the regulator undertaking the functions by name, or to the enactment under which those functions were conferred, which facilitates greater flexibility.

182. Subsection (2) defines the “regulatory functions” in respect of which the power may be used, by reference to s32 of the Legislative and Regulatory Reform Act 2006. In that Act, “regulatory functions” means:

i.

a function under any enactment of imposing requirements, restrictions or conditions, or setting standards or giving guidance, in relation to any activity; or

ii.

a function which relates to the securing of compliance with, or the enforcement of, requirements, restrictions, conditions, standards or guidance which under or by virtue of any enactment relate to any activity.

183. That Act allows the Secretary of State to issue statutory guidance to regulators about the performance of their functions. The power has been used as the basis for the revised Regulators’ Code which was approved by Parliament in April 2014.

184. Broadly, it is the Government’s intention that Reviewers should be appointed in respect of national non-economic regulators currently in scope of the Regulators’ Code. However, Government will give individual consideration to the application of the policy to each regulator before implementation, given the range of statutory arrangements and practices involved, and some regulators within the scope of the Regulators’ Code will be excluded (for example, the financial services regulators – the Prudential Regulation Authority and the Financial Conduct Authority - due to their existing statutory arrangements).

185. Subsection (4) provides that Reviewers can only be appointed in respect of “reserved matters” – i.e. they cannot be appointed in respect of regulatory functions which are the responsibility of the devolved administrations in Scotland, Northern Ireland and Wales.

186. Under subsection (5), regulations specifying the regulators in scope will be subject to the Parliamentary affirmative resolution procedure.