The House of Lords Industry and Regulators Committee has published its inquiry report: Who watches the watchdogs? Improving the performance, independence and accountability of UK regulators, making several recommendations to enhance the performance, independence, and accountability of UK regulators.
The report covers crucial areas such as the mix of duties and objectives, and whether it hinders effective prioritisation, the extent to which regulators are truly independent, how resourcing and skills impact a regulator’s capacity and capability to carry out their functions, and how transparent and accountable regulators are to the government, the public, and their customers. They concluded that the government needs to establish a new ‘Office of Regulatory Performance’ to improve performance and increase scrutiny.
The report highlights the urgent need for regulatory reform, including those for energy, water, and the environment, to address systemic issues such as funding, staffing, and objectives. It also points out the lack of adequate funding and pay for some regulators, which leads to high staff turnover and difficulties in recruiting and retaining skilled staff, especially in environmental and digital expertise areas.
The report warns that some regulators are overloaded with objectives, without clear guidance on prioritising between them. It cites the example of Ofgem, which has been given new duties on net zero and growth, but without sufficient clarity from government.
The report urges the government to ensure that regulators operate as objective and independent bodies and to avoid political interference in their day-to-day workings; expressing concerns over the perception that some regulatory leaders have been appointed based on political loyalty rather than merit.