Committee publication · Report · 10 June 2026 · HC 93
Fourth Report - Regulating for growth
From: Public Accounts Committee
Inquiry: Regulating for growth
Government response deadline: 10 August 2026
Summary
This Public Accounts Committee report examines government efforts to ensure regulation supports economic growth, particularly through HM Treasury and the Department for Business and Trade's March 2025 Action Plan. The Committee finds that while the plan aims to reduce administrative burden by £5.6 billion (25%) and encourage less risk-averse regulators, neither department has clearly defined what growth they're targeting, provided regulators adequate guidance on acceptable risk levels, or demonstrated a credible strategy to achieve the savings target.
Key findings
- HM Treasury and DBT have not articulated what level of risk appetite they expect from regulators or provided examples of how increased risk-taking would deliver GDP growth; only three of 16 required strategic policy statements have been completed.
- Neither department defines 'growth' beyond 'increasing GDP' and cannot specify a timeframe or explain how regulation contributes to key growth drivers such as investment, trade, or productivity improvements.
- The identified savings of £460 million from the Planning and Infrastructure and Corporate Reporting Bills fall far short of the £5.6 billion annual target; the Unit has not yet received departmental simplification plans due a year after the Action Plan's launch.
- DBT cannot confirm the programme is on track and lacks strong accountability measures to hold departments to account; unlike the previous 2015–2023 programme, there are no independent validation arrangements, only departmental Chief Economists, and this process has not yet started.
- Government has attempted at least 10 different cross-government initiatives since 2005 to reduce regulatory costs, yet business still faces challenges navigating multiple overlapping regulators with different interpretations and enforcement thresholds.
Recommendations
- DBT and HM Treasury should set out how they will support departments to provide strategic policy steers to regulators that clarify risk appetites, acknowledge trade-offs, and articulate how regulatory actions are expected to contribute to growth in their respective sectors.
- HM Treasury should establish a time horizon for growth targeted by the Action Plan, including supplementary indicators (investment, costs associated with investment by sector, and productivity) to establish whether the Action Plan influences factors that increase GDP.
- DBT should put in place arrangements to review how effective different regulatory delivery models are (lead regulator, merger approaches) using findings to improve the UK regulatory landscape and inform consideration of merging regulators, with feedback from industrial sectors and consumer groups.
- This Autumn the Unit should publish a table of interventions each department will prioritise to achieve the annual administrative burden reduction target and expected reduction, updated annually.
- The Unit should introduce milestones and regular progress reporting to hold departments to account and report annually to Parliament, with cost savings independently validated.
- Alongside information on interventions, the Unit should monitor expected increases in administrative burden from new legislation, published by department and updated annually, to enable transparency on net reduction progress; midway through the programme, if off-track, the Unit must allocate administrative burden targets to departments.
Tone
CriticalTopics
regulatory-reformeconomic-growthbusiness-regulationpublic-financegovernment-accountability
Key actors
HM Treasury, Department for Business and Trade (DBT), Committee of Public Accounts, Gareth Davies CB, Jim O'Neil, Jessica Glover, Sir Geoffrey Clifton-Brown
Notable line
“It is disappointing that HM Treasury cannot specify a timeframe for the growth it is targeting. Both departments define growth as growing GDP but could not explain to the Committee how regulation achieves it …”
Key Quotes
“It is disappointing that HM Treasury cannot specify a timeframe for the growth it is targeting. Both departments define growth as growing GDP but could not explain to the Committee how regulation achieves it, for example through investment or trade.”
“HM Treasury wants regulators to be less risk averse, but has not provided them with guidance on how to balance growth against regulators' other duties. This is crucial, since regulators must balance multiple objectives and make trade-offs.”
“The departments estimate that the administrative burden associated with regulation costs business £22.4 billion per year. HM Treasury set a target to reduce this by 25% (£5.6 billion) by the end of the Parliament. This implies that the administrative burden will reduce to £16.8 billion per year.”
“DBT could not provide assurance that it will be able to reach the target, because they do not know what component parts will deliver the total figure, nor could it identify large reductions. It alluded to two bills, which together are expected to deliver £460 million in savings, but this pales in comparison to the annual target of £5.6 billion.”
“Without this, HM Treasury's definition of growth amounts to an ambiguous objective rendering success impossible to measure. While short-term growth might mean cutting prices in some areas, longer-term growth could require price increases to encourage investment.”
“Savings under the Business Impact Reduction Programme (2015–2023) were scrutinised by the Regulatory Policy Committee. No such independent validation is planned for the Action Plan target. Instead, validation will be provided by departmental Chief Economists. This process has not yet started.”
Source · parliament.uk record ↗