DRAFT VERSION 0.1
BETTER REGULATION PROCEDURES MANUAL
”Delivering a win win approach to lower cost administration”
Contents
Glossary .................................................................................................................................................... i
Executive summary................................
summary ................................................................
................................................................................................
................................................................................................
..............................................................................
.............................................. iii
Introduction ................................................................
................................................................................................
................................................................................................
...........................................................................................
...........................................................1
........................... 1
Using the procedures manual ................................................................
................................................................................................
..............................................................................................
..............................................................3
.............................. 3
PART A - THE MALTA BETTER REGULATION PRINCIPLES ................................................................
..................................................................................
..................................................5
.................. 5
A 1. Introduction ................................................................................................................................................. 5
A 2. The Malta Better Regulation Principles .................................................................................................. 5
A 3. Application of the better regulation principles ...................................................................................... 9
PART B - Simplification of Regulations & Procedures ................................................................
....................................................................................
.................................................... 10
B 1. Introduction - What is simplification?................................................................................................... 10
B 2. Planning for simplification ..................................................................................................................... 10
B 3. Critical success factors ........................................................................................................................... 12
STEP 1 - Identification of targets for simplification ................................................................................ 12
STEP 2 - Setting priorities............................................................................................................................ 14
2 A. Mapping Exercise................................................................................................................................ 14
2 B. Priorities ............................................................................................................................................... 15
STEP 3 - Considering the options ............................................................................................................... 15
3 A. Determine the freedom that exists for reform............................................................................... 15
3 B. The views of the following should be sought.................................................................................. 16
3C. Options for change ............................................................................................................................. 16
STEP 4 - Developing policy .......................................................................................................................... 21
STEP 5 - Consultation and review............................................................................................................... 22
STEP 6 – Approval / clearance requirements.......................................................................................... 22
STEP 7 – Communicate Regulatory Changes .......................................................................................... 24
STEP 8 - Implement and Monitor Simplification Projects ...................................................................... 26
STEP 9 – Documenting the benefits.......................................................................................................... 29
PART C - BETTER REGULATORY POLICY MAKING................................
MAKING................................................................
............................................................................................
............................................................ 30
C 1. Introduction .............................................................................................................................................. 30
C 2. Characteristics of good regulatory policy making in Malta............................................................... 30
C 3. The basic steps of policy making ......................................................................................................... 32
STEP 1 – Plan the project............................................................................................................................ 33
STEP 2 – Research issue(s) ........................................................................................................................ 33
STEP 3 – Evaluate options .......................................................................................................................... 36
3 A. Options for Consideration.................................................................................................................. 36
3 B. Assessment of the options................................................................................................................ 39
STEP 4 – Develop the preferred policy...................................................................................................... 39
STEP 5 – Carry out consultations............................................................................................................... 39
5 A. Methods of consultation .................................................................................................................... 40
5 B. Who should be consulted? ................................................................................................................ 41
5 C. Characteristics of effective consultation......................................................................................... 42
STEP 6 – Review draft policy and prepare implementation plan ......................................................... 43
6 A. Analysing the results .......................................................................................................................... 43
6 B. Transparency ....................................................................................................................................... 43
6 C. Use of guidance................................................................................................................................... 44
STEP 7 – Obtain Approvals and clearance ............................................................................................... 45
STEP 8 – Communicate policy changes ................................................................................................... 45
STEP 9 – Implement and monitor progress ............................................................................................. 45
STEP 10 – Review......................................................................................................................................... 45
PART D - THE STANDARD COST MODEL................................
MODEL ................................................................
................................................................................................
...........................................................................
........................................... 47
D 1.
Overview ................................................................................................................................................. 47
D 2.
Summary of methodology ................................................................................................................... 47
D 3.
Worked example (Example 1)............................................................................................................. 48
D 4.
Step by step guide to SCM Methodology........................................................................................... 48
STEP 1 – Identify what the regulation requires ....................................................................................... 49
STEP 2 – Identify the actions required to meet the obligation ............................................................. 50
STEP 3 – Calculate the administrative cost per cycle ............................................................................ 50
STEP 4 – Determine the number of cycles per year ............................................................................... 51
STEP 5 – Determine the number of businesses subject to the requirement ..................................... 52
STEP 6 – Calculate the SCM Administrative burden figure ................................................................... 52
STEP 7 – Deduction of ‘business as usual’ costs .................................................................................... 52
STEP 8 – Record corrected SCM administrative burden data............................................................... 53
D 5.
Standard Cost Model – Example 2..................................................................................................... 53
STEP 1 – Identify what the regulation requires ....................................................................................... 53
STEP 2 – Identify the actions required to meet the obligation ............................................................. 54
STEP 3 – Calculate the administrative cost per cycle ............................................................................ 54
STEP 4 – Determine the number of cycles per year ............................................................................... 56
STEP 5 – Determine the number of businesses subject to the Regulation ........................................ 56
STEP 6 – Calculate the SCM Administrative burden figure ................................................................... 56
STEP 7 – Deduction of ‘business as usual costs’ .................................................................................... 57
STEP 8 – Record corrected SCM administrative burden........................................................................ 58
D 6.
Using the standard cost model to evaluate policy options............................................................. 58
D 7.
Contribution of simplification measures to achievement of burdens reduction targets.......... 59
ANNEXES
Appendix 1 – Legal Notice Checklist ................................................................
................................................................................................
................................................................................
................................................ 60
Glossary
Administrative burden
Cost incurred by stakeholders in meeting
information obligations imposed by regulation.
Better regulation
Finding the least burdensome ways for effective
delivery of policy objectives.
Malta Better regulation principles Customer
focus,
Necessity,
Effectiveness,
Proportionality, Transparency, Consistency.
BRU
Better Regulation Unit, Office of the Prime Minister
Business as usual costs
Costs that would be incurred by a business in the
ordinary course of events regardless of a regulation
being in place.
Code of practice
Compliance undertakings published by a trade
association on behalf of its members.
Commencement date
Date when a regulation enters force.
Competent bodies
Representatives of collective interests recognised by
the public administration.
Customer
Includes all stakeholders including citizens, micro,
small and large businesses.
Deregulation
Removal of existing
excessively burdensome.
Enforcement
Activities associated with ensuring compliance.
Focus group
Number of persons brought together for facilitated
discussion to explore a particular topic.
Future proofed
Designed so as not to become out of date.
Goal based
Specifying the objective to be achieved and not the
steps along the way.
Guidance
Advice published by the public administration with
the intention to make compliance easier for
stakeholders.
Information obligation
Administrative burden created by regulation as
opposed to policy costs. Costs associated with a
requirement to collect or provide information.
-i-
regulations
considered
Cycle
Meeting an information obligation on one occasion.
Joined up
Policies which take account of other activities taking
place across the public administration.
Legal notice
Instrument by which regulations are implemented.
Legal notice checklist
Simplified impact assessment process required for
all secondary legislation.
NGO’s
Non governmental organisations or pressure groups.
Pilot testing
Testing an idea in a live situation before roll out.
Self regulation
Allowing stakeholders to put in place arrangements
to secure compliance without a legal regulation.
Standard Cost Model (SCM)
EU method for objectively measuring
administrative cost of regulations.
Transitional period
Period between publication of a regulation and the
date at which stakeholders must comply.
Horizontal regulation
Regulation that applies general principles such as a
duty to trade fairly and is wide in its application.
Impact assessment
Technique and tool used in developing policy options
to ensure all relevant matters are taken into
consideration.
MEU
Management Efficiency Unit, Office of the Prime
Minister.
NI–CO
Northern Ireland Public Service Enterprises.
Regulation
Any rule issued or maintained by the Public
Administration imposing requirements on citizens or
businesses.
Segmentation
Process of quantifying an administrative burden
which causes varying cost levels for different groups
of stakeholders.
Sunset clause
Clause in a regulation that provides for its ceasing to
have effect at a particular future date.
Vertical regulation
A detailed regulation applying to one specific
product or area and narrow in its application e.g.
Nightwear Safety Regulations.
- ii -
the
Executive summary
There is an urgent need for our public administration to address both the
volume and complexity of legislation in place and to introduce policy making
processes that minimise the creation of future burdens.
European Union (EU) funds were secured enabling the Better Regulation
Unit (BRU) to work jointly with the United Kingdom (UK) and Northern
Ireland Public Sector Enterprises Limited (NI-CO) to assist us in developing
the capacity of our public administration to improve our approach to better
regulation building. This exercise builds on the work of our Ministries and
Regulatory bodies to implement the Action Plan for Simplification and the work
of the Better Regulation Unit within the Management Efficiency Unit.
Following extensive consultation across our public administration the
following fundamental principles of better regulation have been agreed to
guide the public administration’s future approach:
Customer focus
Necessity
Effectiveness
Proportionality
Transparency
Consistency
Stakeholders from the industry and constituted bodies are an essential
ingredient in our future policy making and in challenging the existing ways of
doing things. Their input needs to be an integral part of the future regulatory
policy making process.
- iii -
Moreover our administration must ensure that procedures for consultation
are built in our policy making framework and recognise the value of that
contribution.
This manual has been developed by our public administration taking on
board UK and NI public sector expertise to set out:
The agreed principles of better regulation for Malta.
Guidance on identifying priorities for simplification.
Step by step rules to be followed to deliver better regulatory policy
making.
Simple rules to be followed for measuring administrative burdens.
The challenge is now to build on this foundation of principles, tools and
techniques to embed the best practices of regulation throughout our public
administration and fully realise the potential benefits for our society.
- iv -
Better Regulation
Unit
Contact Details
Better Regulation Unit
Management Efficiency Unit
National Road
Blata l-Bajda
Malta
Telephone: (+356) 2599 2948 / 41
Fax: (+356) 2599 2972
e-mail: bru.opm@gov.mt
-v-
Introduction
Better regulation is about finding more efficient ways of delivering policy
objectives without creating unnecessary burdens for our citizens, businesses
and public administration. The better regulation exercise will be translated
into tangible benefits for businesses and the general public. There will always
be a need for regulation and for effective enforcement but it is in everyone’s
interests that avoidable and unnecessary burdens are not created.
Tackling the cumulative burden of regulation and adopting new approaches
to regulation suitable for the 21st century is an important challenge for
countries across the world as competitiveness in the global market place
becomes increasingly critical to economic prosperity. Indeed the desire to
produce better regulation is an important element in the EU’s Partnership for
Growth and Jobs strategy, which updates the Lisbon Agenda’s drive to make
Europe the world’s most competitive economy. The strategy identifies the
need for the Commission and the Member States to simplify the current
regulatory environment. The move should give Europe’s enterprises a better
opportunity to prosper and help consumers get full benefit from the internal
market.
The UK has been at the forefront of efforts to reduce its existing stock of
regulation and to modernise its approach to effective delivery of policy
objectives. Malta has been fortunate in securing EU funds to enable us to
learn from UK experience and in particular that of NI which has a lot in
common with Malta and our public administration.
It is of utmost importance and fundamental to this project that the solutions
adopted in Malta must take fully into account the unique characteristics of
our islands including our culture and heritage, our size and population density
and our limited resources.
Not all of the tools and techniques employed in the UK in their full form are
suitable for direct application in Malta and during this project we have tried
to distil the elements of the UK and Northern Ireland approach that will
work in Malta to deliver results without themselves causing additional
bureaucracy for the public administration.
-1-
The starting point was to engage colleagues across the public administration
to identify what the barriers to better regulation in Malta are and to find
principles that should apply to all regulatory policy making. The end result
has been the Malta better regulation principles which are included in Part A
of this manual.
Using these principles the tools and techniques applied in the UK and NI
have been analysed and documented in Parts B and C of this manual to
provide step by step guidance applicable to all areas of our public
administration as to the manner in which simplification of existing regulation
and better regulatory policy making should be approached. This document
has been created in a way which is:
specific enough to give the tools needed to develop better regulatory
policies and carry out simplification exercises but
general enough to allow the flexibility for addressing every
organisations’ unique characteristics
In looking at the UK and NI tools and techniques many of the best practices
we already operate across our public administration have been incorporated.
Part D of the manual includes a simplified form of the EU Standard Cost
Model (SCM) for the measurement of administrative burdens suitable for
application in Malta.
It is the intention of the Maltese public administration that this manual is
kept alive by regularly updating it to reflect the latest developments in better
regulation and thus ensuring a reference guidance that is current and valid.
-2-
Using the procedures manual
The manual is divided into four parts.
Part A - The principles of better regulation
The agreed principles set the benchmark which all regulation in Malta should
meet.
All public administration should know what the principles are and follow
them in performing our duties. If your actions fall outside one or more of
the principles we are probably doing the wrong thing and need to think again.
The procedures for simplification and better regulatory policy making are
designed to bring a consistent approach across our Ministries and Regulatory
Entities to making the better regulation principles an integral part of the way
we work.
Part B – Simplification of existing regulation & procedures
Provides a roadmap for planning simplification exercises, with detailed
instructions for measuring and mapping the administrative burden for which
Ministries and Regulatory Entities are responsible using the EU Standard
Cost Model.
Provides guidance to identify regulatory requirements in need of reform and
gives best practice examples from what has been achieved so far.
Part C – Procedure for better regulatory
regulatory policy making
The procedure for better regulatory policy making provides step by step rules
to be followed in developing and implementing regulatory policy change.
The aim is to bring a consistent approach across our administration to ensure
that the better regulation principles are met in practice in all regulatory
activity.
-3-
Part D – EU Standard Cost Model
Model for measuring administrative
burdens
Provides a step by step guide to a standardised method for measuring the
cost of administrative burdens created by regulation. Enables the true cost of
regulatory options to be considered and provides a means to measure
progress made in simplification.
-4-
PART A - THE MALTA BETTER REGULATION PRINCIPLES
A 1.
Introduction
The aim in developing better regulation principles has been to share best
practice across our public administration and to provide a simple set of
standards which our future policy making should meet and against which our
actions can be objectively judged.
The principles supplement commitments and actions by the public
administration to promote better service delivery, accountability, good
governance, respect for diversity and environmental sustainability.
The methodology adopted in identifying the better regulation principles
included:
a questionnaire sent to all government departments and regulatory
bodies;
workshop sessions involving colleagues from our Ministries;
workshop sessions involving colleagues from our Regulatory bodies;
expertise of BRU and MEU staff on practical approaches to better
regulation in Malta;
expertise of NI-CO experts on principles adopted in Northern Ireland,
the UK and elsewhere; and
web search of public administration better regulation initiatives.
A 2.
The Malta Better Regulation Principles
The six basic principles of better regulation to which our public
administration should aspire were agreed to be as follows:
Customer focus - We will put ourselves in the shoes of our customers;
Necessity - We will only regulate where and to the extent necessary;
Effectiveness - When we regulate we will achieve the desired outcome;
Proportionality - When we regulate we will avoid unnecessary burdens;
Transparency - We will regulate in an open and inclusive manner; and
Consistency - We will adopt a common approach to regulation.
-5-
Each of the principles was discussed further in the consultation process set
out above to identify the most important actions that are needed to deliver
the principle in practice.
The principles are expressed as ‘We will’ commitments setting out clearly the
standards to which all in our public administration must aspire.
The results of this exercise are as follows:
Customer focus – We will put ourselves in the shoes of our customers
An unequivocal commitment to customer focus is seen as the most
important aspect of better regulation. ‘Customer’ is broadly defined to
include all citizens and in particular small and micro businesses.
We will strive to understand the needs and expectations of our customers to enable us
to provide more responsive, efficient, effective and timely service delivery.
We will adopt simple, transparent, joined up user friendly processes that are easily
accessible and cause minimum possible burden to our customers.
We will set performance standards for our customer service and monitor our
effectiveness by independent audit.
We will ensure our customers are kept informed when they deal with us and we will
acknowledge and investigate any information suggesting improvements can be made.
Necessity – We will only regulate where and to the extent necessary
The need for a change of mind set to consider all alternative options before
regulating is clearly recognised.
We will adopt evidence and risk based approach to regulation and enforcement acting
only where and to the extent this can be objectively justified.
We will consult thoroughly giving full consideration to alternative approaches and
only regulate if there is objective evidence that it is the best, most cost effective or only
practical solution.
We will be pragmatic and consider existing mechanisms and bodies that could achieve
the desired outcome before creating new ones.
-6-
We will ensure that our regulations are subject to regular review and removed when
they are no longer necessary.
Effectiveness – When we regulate we will achieve the desired outcome
Adopting the right practical solutions to solve problems facing our society is
our aim.
Where regulation is necessary we will act with a ‘light touch’ and ‘risk based’
approach targeting controls and enforcement on the problem to be solved avoiding a
‘one size fits all’ approach.
We will use ‘outcome focused’ rather than ‘prescriptive’ regulation leaving freedom as
to the means by which the desired outcome can be met.
We will ensure that mechanisms and resources are in place to promote and enforce
compliance with regulations that we make.
Proportionality – When we regulate we will avoid unnecessary burdens
The administration will always be conscious of the need to avoid creating
excessive or unnecessary burdens.
We will put ourselves in the shoes of the customer to evaluate the impact of any
proposed regulation and ensure that it is reasonable for those potentially affected to
comply within timescales we set.
We will objectively measure the administrative burden caused by our regulation and
keep its cost benefit under continuous review.
We will always conduct enforcement in a proportionate, risk based and fair manner
irrespective of the size or origin of the business.
We will pay particular attention to the impact on the economic activity, with special
focus on the needs of small and micro businesses and also to promoting sustainable
development.
-7-
Transparency – We will regulate in an open and inclusive manner
Our stakeholders should know what is expected of them and have the
opportunity to make their views known.
We will make our requirements, processes, policy guidelines and timescales for
making decisions user friendly, transparent and easily accessible to our stakeholders.
We will write regulations and guidance in straight forward simple language, avoiding
ambiguity and uncertainty, to make them understandable and accessible. Regulations
and guidance will always be accessible on line.
We will make the views of stakeholders expressed in consultation exercises public
(unless there is good reason for doing otherwise).
We will communicate any new requirement well in advance of its coming into force.
Consistency – We will adopt a common approach to regulation
By the use of standard procedures, tools, techniques and training a more
consistent approach to regulation will apply across our public administration.
We will ensure a consistent approach to better regulation in our public administration
by adopting a single set of better regulation principles and procedures.
We will coordinate regulation and data collection across our public administration to
avoid conflicts between legislation or duplication.
We will ensure that all those involved in our public administration receive training to
understand and apply the principles of better regulation in their work.
The EU feels that it is time to cement the needs of SMEs in the forefront of
the EU’s policy and for this reason the Commission is presenting a Small
Business Act (SBA) for Europe. This Act presents a number of principles
and aims to improve the overall approach to entrepreneurship and
irreversibly anchors the ‘Think Small First’ principle in policy making and
regulation. Malta subscribes to this principle through the principles of
Customer Focus, Necessity and Proportionality.
-8-
A 3.
Application of the better regulation principles
The process of thinking through and expression of the principles has
provided the basis for development of the procedures contained in this
manual and associated training programmes. The adoption of the principles
is a core part of the better regulation strategy for reducing the burden of
existing regulation and for future policy making. Therefore, the better
regulation principles:
will form a core part of future policy making;
are intended to form a backdrop to any simplification or new policy
proposal;
will reform our culture and be enshrined as part of our creed;
are intended to apply to all areas of operational practice, rule setting and
enforcement by Malta’s public administration; and
provide an objective means and benchmark for assessing in any instance
if the right approach is being adopted.
Having determined what best practice looks like, it is now thoroughly
embedding that change of mindset and culture in all areas of our public
administration that will determine our success and provide the measure by
which our regulatory reforms will be judged.
The procedures that follow in parts B, C and D of the manual are intended
to enable our administration to meet the principles of better regulation in a
consistent manner.
Without adding to internal bureaucracy the intention is that best practices are
adopted across the administration as a whole.
These principles should serve, amongst others to provide a sense check
mechanism to which we can return for inspiration and guidance.
-9-
PART B - Simplification of Regulations &
Procedures
‘Rolling out the red carpet treatment’
B 1.
Introduction - What is simplification?
The general purpose of better regulation is cutting red tape so that businesses
can be more productive, public services more efficient and citizens freed
from bureaucracy. In order to ensure that a country’s regulations do not place
unnecessary burdens on citizens and businesses, it is important that current
regulations are critically reviewed to ensure that legislation is clear,
understandable, up-to-date and user-friendly.
This part of the procedures manual identifies the steps to be followed for an
effective simplification process. It is important to note that such steps might
not necessarily be consecutively/holistically applicable but might require a
degree of tailoring to reflect any specific requirements of the entity
undertaking the exercise.
B 2.
Planning for simplification
Simplification will be most effective when it is a planned and systematic
activity built into the work programmes of each ministry and regulatory body.
There are 8 steps to simplification which need to be followed as part of the
simplification process. The steps are:
STEP 1 - Identifying targets for simplification
STEP 2 - Setting priorities
STEP 3 - Considering the options
STEP 4 - Developing the policy
STEP 5 - Consultation and review
STEP 6 - Approval/clearance requirements
STEP 7 - Communicate regulatory changes
STEP 8 - Implement and monitor simplification projects
STEP 9 - Documenting the benefits
- 10 -
The table below provides an overview of the proposed methodology tasks,
outputs and techniques that could be used at each step of the simplification
process. Whilst thought should always be given to the applicability of these
techniques even for smaller projects their use should be balanced against
available resources, magnitude / impact of project and project time lines.
Step
Tasks
Outputs
Potential Techniques Used
01
Identifying the targets
for simplification
PRINCE II
PERT
Terms of Reference
Project Plan
Preliminary research findings
Gantt Charts
Critical Path Analysis
Risk Management
Project Planning
02
Setting priorities
SCM Quantification of Findings
Standard Cost Model
03
Considering the options
Evaluation criteria / methods
Evaluation report
Cost-benefit analysis
Social impact assessment
04
05
06
Developing the policy
Consultation and review
Approval / clearance
requirements
Simplification Proposal
Memo to Minister / Cabinet Memo (as
necessary)
Consultation Plan
Approval to proceed
Consolidated analysis of feedback
received
Implementation Plan
Communications Plan
Cabinet Memo / Memo to Minister
Approved Cabinet / Ministerial decision
to proceed
Attorney General’s clearance
Pros/Cons
Feasibility, Suitability and
Acceptability
Report writing
Quality control
Approvals/clearances
Surveys
Interviews
Refer to above steps 2, 3 and 4
Meetings
Focus groups
Documentation analysis
07
Communication
Information campaign (if necessary)
Refer to above step 4
08
Implementation and
Monitoring
Simplification outputs
Progress reports
Project management
Risk management
09
Documenting the
benefits
Benefits realisation / closure report
Compare actuals against SCM
and predictions
Qualitative analysis of progress
- 11 -
UK Government departments and agencies are each required to produce annual
reports on their progress in reducing administrative burdens and implementation of
better regulation. They are also independently audited for their performance on better
regulation and detailed reports are published.
B 3.
Critical success factors
In order to ensure a crisp delivery to a simplification initiative, it is important
to ensure that critical success factors are adequately in place:
Proper planning will ensure that the issues causing the most significant
burdens and those where solutions are readily available are prioritised.
Arrangements for identification and consultation with stakeholders to
fully take the views of all stakeholders into account in setting priorities.
Sufficient resource must be allocated to see a program of simplification
through to completion.
Additional burdens and unintended consequences can result if a
simplification process is not implemented effectively.
Each stage of the process must be fully documented.
STEP 1 - Identification of targets for simplification
There are a number of ways to identify regulations requiring simplification or
revocation:
Failure to meet one or more of the better regulation principles
Overly frequent reporting requirements not compliant with electronic
reporting options
Little evidence of enforcement activity
Complaints (direct and via ombudsmen / umpires)
Analysis of customer care system output
- 12 -
The Business and Enterprise Unit within the National Statistics Office (NSO) has
reduced the response burden for its annual Structural Business Survey (SBS) following a
critical cost-benefit analysis. Whereas previously the SBS was sent out to all businesses
and enterprises, irrespective of their size and the number of employees, in 2007 a
decision was taken to go for a sample, rather than a census, for small businesses and
self-employed. The SBS is now sent to all businesses employing 5 full-time equivalents
and over, and is sampling those employing less than 5. This is done by stratifying small
businesses into 12, based on two main variables: employment and turnover. For each
stratum, if there are less than 5 units for a particular economic activity, all units are
surveyed. Where there are between 6 and 9 units in any stratum, 30% are randomly
selected, whilst where there are 10 units or more in any stratum, 20% are selected.
Over the next year more steps will be taken to simplify and shorten the questionnaires,
thus further reducing the burden on respondents.
Discussions with industry and their competent bodies
Submissions made to the BRU through email, web portal and other
means of communication
Evidence of overlap with EU or other domestic requirements and
duplicated information requirements
Regulation that is very specific or prescriptive in its approach
That the requirement has been in place for a number of years without
amendment
Cumbersome forms
Long-standing regulation or legislation.
The Better Regulation Unit (BRU) set up within the Management Efficiency Unit
(MEU) together with the support of a network of Government departments and agencies
has developed and is co-ordinating the implementation of the Action Plan for
Simplification. In drawing up this Action Plan the BRU has taken a ‘top-down’ and
‘bottom-up’ approach which resulted in 111 measures subdivided into five main
thrusts: Setting up of a One-Stop-Shop Entity or consolidation of existing entities (8
projects); Revision of procedures/processes (39 projects); Use of ICT and e-Government
services (25 projects); Simplifying legislation and repealing obsolete legislation (32
projects); and Consolidation of forms (7 projects).
- 13 -
STEP 2 - Setting priorities
Policy development must not be created in isolation. Liaison at an early stage
with other Ministries and Regulatory bodies is very important.
Each Ministry and Regulatory body should fully understand the impact on
their stakeholders of all measures for which they are responsible.
2 A.
Mapping Exercise
A consistent systematic process of mapping these requirements and the
burdens for which Ministries and Regulatory bodies are responsible is
required and the EU Standard Cost Model method should be used for this
purpose.
In order to assist member states with the better regulation process the EU has
adopted the Standard Cost Model for assessing administrative burdens resulting from
regulation.
In summary the Standard Cost Model requires the identification of the:
precise legal basis and scope of each individual information and data
obligation
population subject to the requirement (and segmented if sections of the
population incur differing levels of cost)
costs they incur during one cycle of activity
number of times the action is required to be performed each year.
By multiplying the results a SCM assessment of the cost resulting from the
administrative burden is arrived at. This standardised cost may then be used
objectively in quantifying progress made in deregulation and better regulation
both within member states and at EU level.
Full details of how to apply the EU Standard Cost Model are included
in Part D of this manual.
- 14 -
2 B.
Priorities
Having carried out this mapping exercise the focus in seeking to reduce those
burdens should be to target the ten issues presenting the maximum burden,
identified as very high impact in the figure below as this is where the
potential for greatest benefit for stakeholders is likely to be found.
Regulatory impact priority matrix
Obligations that are very costly and affect a large number of firms would be a
high priority for simplification. However, it is important to note that this
should not be taken as the only focus. For example the following can also
achieve significant results:
Simplification that targets lower cost obligations that affect very large
numbers of firms
Costly obligations that affect few firms
Obligations that cause disproportionate annoyance to stakeholders.
STEP 3 - Considering the options
3 A.
Determine the freedom that exists for reform
It is important to establish upfront whether there are any external treaty
obligations that require the measure. This should immediately determine the
degree of flexibility in changing the regulation / s.
- 15 -
The legal office within each Ministry or regulatory body should identify and
resolve any potential legal issues with the proposed change at an early stage
consulting with other areas of the public administration.
3 B.
The views of the following should be sought
Departmental and Ministerial colleagues
Representatives of those incurring the administrative burden
Those appearing to be responsible for enforcing the requirement
The BRU within MEU.
Normally there will be members of the public administration who already
have deep insight and perspectives and this is normally a good starting point
for gathering information.
It is of critical importance to try to understand from a customer and
stakeholder perspective what the perceived issues are, obtain their feedback
regarding priorities, what action is needed and what alternative approaches
there might be.
Having considered the evidence and determined that scope for burdens
reduction exists the next step is to determine the desired outcome to be
reached.
All possible options should be identified, listed and scored against the better
regulation principles.
3C.
Options for change
All options should be considered in the first instance.
Maintain the status quo
It is just as much a success to consider all the available options and to decide
that it is inappropriate to act, as it is to generate change.
From the perspective of the businesses and citizens adapting to change can
often cause more of an administrative burden than the status quo.
- 16 -
Deregulation
Given the cumulative impact of regulation on economic well being, removal
of regulation that is unnecessarily burdensome must always be our starting
point. If a regulation serves little or no useful purpose or if what it achieves
is disproportionate to the benefits derived it should be removed.
Self regulation
Can provide a powerful and more effective result than traditional regulation
if the stakeholders concerned behave responsibly. Controls of one form or
another can always be reintroduced in case of irresponsible behaviour.
The Fair-pricing Agreements in Retailing (FAIR) euro changeover initiative was a
voluntary commitment by a business organisation to undertake a fair pricing strategy
and to take up and communicate best practices in preparation for the euro changeover.
FAIR was open to all retail organisations. The FAIR participants were committed not to
increase prices during a period when consumers would still need to familiarise
themselves with a new currency; to abide by the dual display regulations; to follow euro
changeover guidelines as issued by the NECC (National Euro Changeover Committee);
to ensure that staff members were well trained; and to display and distribute any
promotional and/or informational material provided by the NECC. Participants received
free staff training from NECC, a free retailers’ toolkit and free publicity.
The Broadcasting Authority regulates broadcasting content on local radio and
television broadcasting stations. Conscious of the extent of its responsibility, the
Broadcasting Authority has from time to time constituted Advisory Committees on
specific areas to help it better perform its obligations. Such committees are made up
of media professionals, licensed broadcasting stations, and stakeholders. A
consultative document is prepared, advertised for public consultation, open-forums
organised, and the consultative document is revised.
The Broadcasting Authority also adopts guidelines which are made available to
broadcasters, broadcasting stations, and advertising agencies through the Authority’s
website. To name a few these include toolkits for factual programming on persons with
disabilities; diversity toolkits for radio and TV producers; guidelines on audio-visual
content created for children; reporting of news on the commission of offences, their
investigation and Court proceedings; and advertising of Medicines, Treatments, Health
Claims, Nutrition and Dietary Supplements.
Cont’d on next page
- 17 -
Cont’d from previous page
A case in point are the latest amendments to the Maltese Orthography issued by the
National Council for the Maltese Language. These amendments have already been
circulated amongst all the local radio and television broadcasting stations [BA Circular
32/08] and an advisory committee has already been set up between the Broadcasting
Authority and the National Council not only for the proper implementation of these
amendments but also to identify problems in the proper use of the Maltese Language
on broadcasting media; to upgrade the Maltese Language with the latest technical
terminology; and to promote the proper use of the Maltese Language by advertising
agencies.
Advertising in the UK is largely regulated by the Advertising Standard Authority a
private body funded by a levy placed on advertising space. It has a detailed code of
practice and an independent committee to rule on complaints received. Details of
findings are published and the ultimate sanction is to advice publishers not to take
advertisements from the business concerned.
Code of practice/ ethics
Can be effective in situations where the stakeholders that are required to act
participate in a cohesive group such as a trade associations which are able to
both inform and encourage compliance.
Use of economic instruments
The provision of grants to encourage desired courses of action or
encouraging a move away from problem behaviour by making it more
expensive relevant to other ways of doing things can deliver desired
outcomes rapidly and effectively.
The Malta Environment and Planning Authority (MEPA) through the Timber
Balcony Scheme makes available funds in grants to help restore the timber balconies.
This scheme is aimed at enabling owners to maintain their premises, particularly those
located in the village cores. MEPA allocates a sum of money for this scheme every year
and each year a different emphasis is placed (e.g. balconies belonging to philanthropic,
cultural and political organisations and clubs; all scheduled houses; properties in
Valletta, Floriana and the three Cities etc.).
- 18 -
In July 2004, Government published a consultation document regarding
standards in childcare with the aim of establishing a regulatory framework on early
childhood services. National standards were being proposed on childcare services to
promote, regulate and monitor high quality educational childcare services.
Consequently, the Management Efficiency Unit (MEU) was asked to carry out a Financial
Impact Study of the proposed standards on identified child day care service providers.
The aim of this assignment was to assess the compliance requirements and the related
costs of the childcare centres based on a representative sample of child day care
centres and to enable the Technical Committee on Child Day Care (TCCDC) to put
forward recommendations as to any justifiable set up grants and subsidies.
Competition
Adopting market based solutions e.g. by encouraging price and labelling
transparency and encouraging customers to be savvier.
Reliance on Standards
Quality management standards can often provide a suitable approach for
addressing complex issues involving more sophisticated stakeholder activities.
To remove possible constraints on female participation in the workplace the
government wished to encourage day care provision for the 0-3 year age group. To
regulate this provision a National Standard for Child Day Care facilities was developed
in committee with stakeholders and launched in July 2006. In October 2006 the MFSS
launched an improvement grant scheme tied to registration under the standard. This
coupled to publicity given to registration and encouragement in meeting the standard
has been very successful in driving the availability of affordable child day care with high
standards vs. traditional regulation).
General authorisations
Can provide a viable alternative to licensing. The power to negatively licence,
i.e. to ban someone from a particular activity, can be a preferable more
targeted approach.
Negative licensing or the ability to stop someone form doing something can
prove far less burdensome than licensing the vast majority of compliant
stakeholders.
- 19 -
Horizontal measures
Replacement of detailed product or issue-specific regulation by a more
general and flexible framework approach.
The Malta Standards Authority has used a general safety requirement to remove
a number of very detailed product specific regulations. By virtue of the Product Safety
Act (Cap 427) the Construction Products Regulations, transposing fully the Construction
Products Directive (89/106/EEC), were published in the Government Gazette of Malta
No. 17,157 of 2 November 2001, as Legal Notice 270 of 2001. These regulations
came into effect as from 1 July 2002, simultaneously repealing the following old
mandatory orders that used to regulate specific fields of Construction in Malta, namely:
M1 of 1998 – Hot Rolled Steel Bars for the Reinforcement of Concrete (LN 47 of 1998)
M6 of 1980 – Ready-Mixed Undercoat for Enamel Paint (LN 95 of 1980)
M8 of 1981 – Steel Fabric for the Reinforcement of Concrete (LN 16 of 1981)
M11 of 1982 – Red Oxide Priming Paint (LN 73 of 1982)
M12 of 1982 – Red Lead Priming Paint (LN 74 of 1982)
M13 of 1985 – Plastic Emulsion Paint (LN 10 of 1985)
M14 of 1985 – Flexible Polyurethane Foam (LN 39 of 1985)
M20 of 1987 – Polyethylene Damp-Proof Courses for Masonry (LN 60 of 1987).
Thus, the Construction Products Regulations have been used as the “framework”
legislation establishing the MINIMUM health and safety requirements for such products
to be incorporated in buildings whilst the technical details are found in Harmonised
Standards and / or European Technical Approvals.
The Malta Tourism Authority (MTA) was experiencing problems with the
misselling of timeshare products. A decision was taken that the licensing of ‘outside
promotional contacts’ was necessary to combat this. To encourage compliance and
limit inspection costs a system was put in place where marketing companies are
required to set up a bond of €2329.37 in favour of MTA in respect of each OPC it
engages. Non compliance costs are deducted from the bond which the operator is then
required to make good within seven days.
Often techniques may be used in combination to deliver the required
outcomes.
- 20 -
Assessment of the options for change
For each potential option for change the available information and evidence
should be scored against the better regulation principles outlined in Part A of
this Manual.
STEP 4 - Developing policy
Once the goal and policy direction has been agreed it is then necessary to
work on the detail and to test the evidence and assumptions on which it is
based.
A team approach with regular meetings involving a broad range of
stakeholder interests including colleagues responsible for enforcement and
colleagues in other areas of the public administration can be extremely
beneficial to getting the policy right.
Stakeholders may have vested interests in the existence of burdensome
controls which reduce competition or access to the market by potential
competitors. These are not valid justifications for the retention of controls.
Look for best practice examples of how similar problems have been
addressed both by the Malta public administration and overseas.
Check ideas and thinking to ensure that they satisfy the better regulation
principles.
Intellectually test proposed ideas with public administration colleagues
including the nominated better regulation coordinator.
Discuss ideas with those responsible for enforcement.
Consider a pilot exercise to test whether your proposal works in
practice.
Discuss ideas with those experiencing the cost burden.
The UK Better Regulation Executive have developed a simple online tool to
enable the cost burdens for potential changes to administrative obligations to be easily
tested. More information can be found on: www.abcalculator.berr.gov.uk.
- 21 -
Measure cost to the public administration including administration,
enforcement and potential loss of revenue. Use the Standard Cost
Model to evaluate burden of proposed measure.
Consider the extent to which ‘change’ itself creates a burden to those
affected.
STEP 5 - Consultation and review
The extent of external consultation must be a matter of judgement depending
on the type of change involved.
If seeking to repeal an existing measure that is outdated and no longer
applied then the following may be sufficient.
Notify representatives of those potentially affected in writing and
requesting a response giving a reasonable time period (4 weeks).
Alerting other departments and regulatory bodies to your intention again
giving 4 weeks notice.
However, if the proposal is likely to affect a large number of stakeholders or
is potentially controversial discussions within the public administration and
with the representatives of the stakeholders should be undertaken to establish
whether a full consultation exercise should take place (which is explained in
more detail in Part C Step 5 of this manual).
Identifying problems and better courses of action is the purpose of
consultation and every effort should be made to take on board any feedback
received.
STEP 6 – Approval / clearance requirements
The legal office of the relevant Ministry and / or Regulatory Body should be
responsible for the legal drafting. The legal office should be assisted by the
Policy Development Directorate and / or other technical persons which are
well versed with the area being regulated. The following steps should be
followed:
1.
Conduct a thorough research exercise which identifies any potential legal
issues with the proposed changes.
- 22 -
2.
Consultation must take place with:
a. the businesses and citizens being impacted (or their representatives);
b. other areas of the public administration to avoid possible
duplication and to ensure legal practicality; and
c. the EU Secretariat to ensure consistency with the Maltese positions.
3.
A draft legal notice taking into account the outcome of the consultation
should be completed.
4.
A ‘legal notice checklist’ must also be completed for any proposed legal
notice (vide Appendix 1).
5.
The final proposal must be submitted to Cabinet by the relevant
Minister who should be consulted throughout the process. The
submission to Cabinet should include the following:
Proposed legal notice
Completed legal notice checklist
Proposal to Cabinet (Cabinet Memorandum).
The Cabinet Memorandum should set out the following:
Background to proposed measure
Purpose
Issues
Opportunities
Options considered
Next steps.
The Cabinet Memorandum should include a clause stating that the
proposal is bound to clearance from the AG’s Office and will only be
referred back to Cabinet if there are material changes from the AG’s
Office.
Each department should draw up or update manual of Standards
operating Procedures. These set of instructions should cover the main
features of operations that lend themselves to a standardised procedure
without loss of effectiveness.
- 23 -
6.
Following Cabinet’s approval the proposal is submitted to the AG’s
Office for the necessary vetting and clearance.
STEP 7 – Communicate Regulatory Changes
It is very important to ensure that any regulatory change particularly a
deregulatory change is communicated effectively.
Moreover such
communication needs to be regular and continuous and not a one-timeexercise when the first change takes place. Stakeholders, both internal and
external should be kept informed on a continuous basis.
The change must be communicated to those:
involved in advising stakeholders on the requirement
responsible for the enforcement of the requirement
stakeholders who might otherwise continue to shoulder unnecessary
burdens.
Whilst the simplification initiative may have been an officials core project for
a period of time rest assured that the stakeholders and general population will
know far less and have a limited attention span and a natural resistance to
change.
Characteristics of effective communication
Targeted
Effective – Gets the message across
Is accepted as valid
Message is acted upon
It is necessary to work up a properly thought through communication plan
well in advance.
- 24 -
Preparing a communication plan
In preparing a communication plan the following points should be addressed:
Who is affected by the proposal?
What do they need to know?
What are the available means of conveying the information to them?
Where do they get information from?
−
Word of mouth – accuracy
− Literacy levels
What communication method or combination of methods is likely to be most
effective?
− Email?
− Writing?
− Face to face public meeting?
− 1 to 1 meeting?
− Directly from yourself or the enforcement body?
− By inclusion with some other information they receive?
− Can a trade body or other interlocutor assist?
− Is there a role for the printed or audio visual media?
Remember that this is not about ticking a box on a checklist – this phase is
fundamental to delivering a successful outcome.
Requirements should normally be communicated well in advance of their
coming into force (with the exception of fiscal measures).
Thought should also be given to the communication of the measure to
‘vulnerable groups’.
Regulations and guidance should always be accessible on line and a hard copy
free of charge on request.
It may be that adopting a common approach to communication across the
Public Administration may be effective – for example that the Local Council
office is always equipped to advise or signpost where advice can be obtained
from.
- 25 -
The adoption of a one stop shop approach to the availability of information
and guidance for stakeholders would also potentially reduce the ongoing cost
burden of a more piecemeal approach.
STEP 8 - Implement and Monitor Simplification Projects
Change of itself is potentially a serious short term burden. It requires those
affected to spend time to understand how they have to behave differently
than they may have done in the past.
Transitional periods and commencement dates
Considerable thought must be given to the transitional period to be given to
achieve compliance and the date or time of year when the measure will come
into force.
Getting the initial launch and uptake right is often critical to long term
success and minimises longer term costs to the public administration and
stakeholders.
Whilst on some occasions timescales are set by EU treaty obligations or the
need to bring a measure in quickly in respect of a serious safety related matter
often there is more flexibility.
It is important to check what other challenges the stakeholders may be facing
at the time when a measure is to be implemented.
There is no point asking a hotel or water sports operator to implement
detailed changes at the height of the summer season. It is similarly fruitless
to ask a retailer to implement changes in the run up to Easter or Christmas
trading periods.
In the UK efficiency savings are reported as having been achieved through the use of
common commencement dates with all regulatory measures coming into force in early April or
September each year.
The tendency for policy makers is to want to implement measures quickly in
order to move on to other tasks.
- 26 -
This is often the wrong approach leading to poor implementation and non
acceptance of the policy by stakeholders and sometimes considerably higher
costs for stakeholders and enforcement agencies than might otherwise have
been possible.
Measures enacted in haste can become discredited through low initial
compliance rates and indeed then very difficult to achieve a high level of
compliance without serious resource commitment.
A lengthy transition period does give the stakeholders the opportunity to plan
in advance and to negotiate properly for commercial services that they may
need to assist. Smaller businesses may need a longer period to comply than
larger businesses.
Enforcement
A clear understanding of who is to enforce the requirement and in what way
can make a big difference to both securing the desired outcome and also to
the burden created for stakeholders.
Memoranda of understanding between different areas of the public
administration can be effective in providing clarity of responsibilities.
A memorandum of understanding exists between the Department of Public
Health and the Water Services Corporation setting out clearly the responsibilities of
both bodies in respect of matters related to the testing of lower house drains.
Enforcement strategy
There should be a very clear view as to the strategy to be adopted. A risk
based approach should be adopted. Consideration is to be given to:
the level of resource to be applied
inspection or reactive
inspection frequency
initial actions to be taken in case of non compliance
escalation procedures.
Each regulatory body should know the priority and expected activity for each
of the measures for which it is responsible to ensure the proper direction of
resource.
- 27 -
Adopting a clear and transparent approach should assist in dispelling such
concerns as to the fairness of enforcement.
The UK recently carried out a major consultation exercise ‘The Rogers Review’
across its Ministries, Agencies and personnel in local authority enforcement
departments to determine what should be the top 6 national enforcement priorities for
local authority enforcement. Local authorities were then encouraged to focus resource
on these areas and to be largely reactive elsewhere. Each local authority is required to
develop its own service delivery plan reflecting these priorities.
Full liaison should take place with the body responsible for taking ongoing
promotion and enforcement of the measure. The enforcing body will
normally have close links with the stakeholder community needing to adopt
the measure and will have good insight as to the best means of going about
implementation.
Proper training is also necessary to ensure that the correct advice is always
given when inspection activity takes place or advice is sought.
For complex measures training should be provided in an interactive way
enabling any queries or uncertainties to be resolved. It is best practice for it
to be a condition of enforcing any particularly measure that the enforcement
officer has received specific training.
The overall purpose of enforcement is to proactively secure compliance not
punishment. Proactively working with stakeholders to encourage the sharing
of problems and best practice can be a very effective technique in improving
standards but requires trust and responsibility.
The Air Navigation Order enforced by the Civil Aviation body puts a requirement
on certain aviation personnel to report safety related occurrences which have not
resulted in an accident or serious incident. A ‘just culture’ concept has been entered in
to with to encourage reporting without fear of reprisal or enforcement action. The end
result has been improved transparency of reporting improving understanding of
potential problems and ability to alert other stakeholders improving aircraft safety
practices.
- 28 -
Those responsible for regulatory enforcement should meet regularly to share
best practice approaches to learn from each others evolving best practices.
STEP 9 – Documenting the benefits
A record should be kept of all the background information relating to the
change including an explanation of how the priorities where chosen (Step 2)
and how the analysis of the options was carried out (Step 3), the outcome of
the consultation process and any problems encountered.
The reduction in administrative burden calculated using the EU Standard
Cost Model method should be validated and logged.
A closure report must be completed.
The simplification of regulations and procedures is not a one process, but
should be seen as a policy cycle. Thus, after the simplification project is
implemented it should be evaluated and monitored to ensure that the
necessary refinements are carried out. This would ensure that there is no
element of creeping in of regulations/requirements which would remove the
benefits which had accrued in the first place.
- 29 -
PART C - BETTER REGULATORY POLICY MAKING
C 1.
Introduction
In Malta there are a number of recent major best practice examples where
regulatory policy change has been very effectively and professionally
delivered.
Preparations for entry to the EU, taking on board the ‘Acquis Communitaire’
and more recently the adoption of the euro are a few examples. It is
important to adopt the learning experiences from these initiatives and others
outlined in the following sections in day to day regulatory policy activity.
C 2.
Characteristics of good regulatory policy making in Malta
Appreciate the local environment
Malta has a unique culture and heritage reflecting both its environment and
history. As a small and densely populated island its people and their skills are
the key resource. Economic well being depends on trade with other countries
in an increasingly competitive global market place. The way policy is made
and activities organised have to build on these strengths, yet should always be
conscious of the need for change.
Forward thinking
Anticipating future social, economic and technological developments.
Goal based
Making sure that the outcome is delivered without placing unnecessary
emphasis on the manner in which it is to be achieved.
Future proofed
Policy should not be dependent upon factors and detail that will become
redundant. For example, a sunset clause may be included in legislation.
Innovative
Whilst it is always useful to know what approaches have previously been
adopted, change provides the opportunity to innovate and find better
solutions.
- 30 -
Flexible
The ability to spot and seize new and exciting opportunities is very important
when information and ideas are being looked at afresh. The policy maker
should be careful not to be overly conditioned by the past experiences.
Outward looking
Whilst creativity is valid, reinventing the wheel through lack of awareness of
things done elsewhere is not. The policy maker should be scanning the
horizon to find and adapt best practices from wherever they exist or are
being developed.
Inclusive
Good policy cannot be made without a real grasp of all the surrounding
circumstances, so sharing ideas and input from as many stakeholders as
possible is of key importance.
Joined up
There is a tendency to work in isolation for a whole host of reasons.
Whatever challenge faces us, there will be parallels in other policy areas. Also
more directly, there are probably other policies that impact positively or
negatively on the policy, which need to be known.
Learn lessons
Doing something one way and failing is one thing, but repeating it several
times and failing each time is both unnecessary and wasteful and should be
avoided. Reviewing the outcome of actions to guide future policy is
important.
Follow the better regulation principles
Proposals for new policies and regulations could be in line with the better
regulation principles outlined in Part A of this manual.
- 31 -
C 3.
The basic steps of policy making
STEP 1 – Plan the project
STEP 2 – Research issue(s)
STEP 3 – Evaluate options
STEP 4 – Develop the preferred policy
STEP 5 – Carry out consultations
STEP 6 – Review draft policy and prepare implementation plan
STEP 7 – Obtain approvals /clearances
STEP 8 – Communicate policy changes
STEP 9 – Implement and monitor progress
STEP 10 – Review
As highlighted in Part B on the Simplification of Regulations and Procedures,
it is important to note that the above steps might not necessarily be
consecutively/holistically applicable but might require a degree of tailoring to
reflect any specific requirements of the entity undertaking the exercise.
The table below provides an overview of the tasks, outputs and techniques
that should be used at each step of the better regulation making process:
Step
Tasks
Outputs
01
Plan the project
Potential Techniques Used
Terms of Reference
Project Plan
Preliminary research
findings
Identify key stakeholders
PRINCE II
PERT
Gantt Charts
Critical Path Analysis
Risk Management
Project Planning
02
Research issue(s)
Research paper
PESTLE analysis
SWOT analysis
McKinsey 7S framework
03
Evaluate options
Evaluation criteria /
methods
Evaluation report
Cost-benefit analysis
Social impact assessment
Pros/Cons
Feasibility, Suitability and
Acceptability
First draft policy proposal
(Paper)
Cabinet Memo
Consultation Plan
Cabinet approval to
proceed
Report writing
Quality control
Approvals/clearances
04
Develop the preferred policy
- 32 -
Step
Tasks
Outputs
05
Carry out consultations
Consolidated analysis of
feedback received
Surveys
Interviews
Meetings
Focus groups
Debates
Documentation analysis
06
Review draft policy and prepare
implementation plan
Revised / re-engineered
Policy Proposal (Paper)
Implementation Plan
Communications Plan
Legal Notice Checklist
Cabinet Memo
Refer to above steps 2, 3 and 4
Refer to above step 4
Approved Cabinet decision
to proceed
Attorney General’s
approval of proposed draft
Bill / regulations
07
Obtain approvals /clearances
Potential Techniques Used
08
Communicate policy changes
Communications strategy
Stakeholder analysis
Various tools/media
09
Implement and monitor progress
Project management
Risk management
Various outputs, e.g., law,
institutions, enforcement,
etc.
Progress Reports
Review reports
Benefits realisation
Monitoring of key performance
indicators
Quantitative and qualitative
analysis
10
Review and evaluation
STEP 1 – Plan the project
Policy making should start by planning what you intend to do. Project
planning includes:
Agreeing Terms of Reference
Setting up the project team
Carrying out desk-based research to provide input into the plan
Identifying and mitigating risks
Planning the required time and budget.
STEP 2 – Research issue(s)
Effective regulatory policy making is a team game that can’t be done in
isolation or without a full understanding of the issue and all the surrounding
circumstances.
- 33 -
Policy making takes time and resources if it is to be carried out effectively to
deliver a satisfactory result. Consequently, resource requirements and
timescales need to be defined at the beginning of the process.
An important task is to try to understand from a customer and stakeholder
perspective what the perceived issue and need for action really is. Normally
there will be members of the public administration who already have
insight/opinions and perspectives and this is normally a good starting point.
Policy development must not be done in isolation or in absence of key
learning and information, so early outreach to other Ministries and
Regulatory Entities is very important. In this way conflicts with other
regulatory requirements and duplication can be avoided.
Regular planned and also informal contact and data sharing with other
Ministries and Regulatory Entities towards delivering common goals
represents best practice.
Reliable information and insight to understand the issue must be actively
sought from a wide range of sources:
Potential information sources:
Government policy
Colleagues in your department / body
Colleagues in other departments / bodies
EU
Other public administrations
NGO’s
Stakeholders
Trade unions
Consumer representatives
Output from customer care systems
Economic and other statistical data
research evidence
public opinion / surveys
Press articles / letters
Internet
- 34 -
A thorough approach to information gathering at an early stage will pave the
way for achieving the right outcome.
Identify all stakeholders, their roles and listen to what they have to say and
make an initial assessment of their expectations.
When Government was planning to introduce the Environmental Management
Construction Site Regulations whose main aim was to minimise nuisance to neighbours
and the public emanating from the construction industry, the Ministry for Rural Affairs
and the Environment held a number of informal meetings with stakeholders in the
construction industry, including the Kamra tal-Periti, Constituted Bodies, Building
Industry Consultative Committee as well as a number of building contractors to hear
their preliminary views and opinions.
Informal consultation in the initial stages of policy making with stakeholders
is often crucial as these groups will have a clear idea about what the problems
are, why the situation is as it is and why previous initiatives did or did not
work.
Stakeholders are also well placed to advise on how a new policy can be put
into practice and what pitfalls need to be avoided and what unintended
consequences may result.
Best practice is for established procedures to be in place for the regular
liaison with stakeholders. This would ensure their engagement and
understanding.
The Superintendence of Culture Heritage holds quarterly and annual meetings
with NGOs and other stakeholders in its sector as required by the Culture and Heritage
Act 2002.
All policy making must be evidence based. The policy maker needs to be
convinced that a real need for intervention of some form exists before
proceeding.
- 35 -
Identify policy objectives
Having considered the views of all concerned and all available evidence and
determined that action is necessary the next step is to decide the desired
outcome to be reached through intervention. Clarity on the desired outcome
is essential to keep intervention appropriately targeted and avoid creating
unnecessary administrative burdens.
Maximum freedom must be given to stakeholders to achieve the desired
outcome in their own way rather than defining in detail the steps to be taken
along the way.
The policy response must be proportionate to the problem. Careful thought
should be given to the likely effectiveness of intervention. There is no point
regulating for a specific problem in a way that can be easily circumvented or
simply won’t apply in many similar situations that might arise in future.
A range of options including maintaining the regulatory ‘status quo’ and
tackling the issue within the existing legal framework must be considered.
STEP 3 – Evaluate options
It is very important to keep an open mind and be objective in considering all
the potential options.
The tendency to follow a ‘safe’ traditional regulation approach because that’s
the way it has been done in the past in this area of the administration must be
avoided.
It is important to avoid a ‘just going through the motions’ in looking at
alternatives to traditional regulation. This would just waste resources and
miss opportunities to act to regulate better.
Wherever possible a ‘horizontal approach’ should be adopted. One should
look at creating a framework within which all issues that may arise can be
solved rather than adopting a more narrow specific or ‘vertical’ approach.
3 A.
Options for Consideration
All possible options should be identified. A list of all options for
consideration is included in Part B Simplification of Regulations and
Procedures Step 3C. Other options for consideration include:
- 36 -
Better enforcement
The problem may not be the legal measure but the activity undertaken or
poor performance by the enforcement body.
A committee made up of representatives of the Employment and Training
Corporation (ETC) and the ministries responsible for social policy, for finance and for
education was set up in August 2003 in order to draw up and plan a national campaign
against undeclared work. This committee served as the platform for the exchange of
information that can be of help in the fight against undeclared work, tax evasion or
fraud in social benefit claims. More information can be found on:
http://www.doi.gov.mt/en/commentaries/2004/05/tim13.asp
In order to strike a balance between efficiency and effectiveness, the OHSA, on a
regular basis, carries out targeted inspections through which it focuses on key OHS
issues in different sectors.
Prior to the actual workplace visits, the OHSA communicates with all the entities it
intends to visit to inform them of the purpose of the visits and what issues will be
inspected. The actual visits that ensure will then focus on these items and action taken
will be proportionate to the risks observed by the Officers.
Moreover, given the sensitivity surrounding enforcement of OHS regulations. As a
result, it has issued an enforcement policy based on a number of principles to ensure
firm, just and fair enforcement of H&S legislation. Such policy has also been made
public.
Furthermore, the OHSA has also drafted a Standard Operating Procedure to outline how
its administrative fine system will be put in operation and what mechanisms will be
used both internally within OHSA and externally when dealing with the various duty
holders.
Raising awareness
Compliance may be low because stakeholders do not appreciate that they are
required to comply.
- 37 -
The Consumer Complaints Office at MFSA regularly issues information booklets
aimed the general public. Typical examples of these are the Insurance Guides on
insurance in general, home insurance, motor insurance, travel insurance and life
insurance. These guides provide guidance to consumers regarding what to look out for
when purchasing insurance policies. Another example is the Guide on Markets in
Financial Instruments Directive (MiFID) which explains the basis of this Directive and
the way in which it will affect investors when dealing with investment services firms in
Europe.
The Guide to good hygiene practice aids the food business operators at all levels
of the food chain with the compliance to the food hygiene rules and with the application
of the Hazard Analysis Critical Control Point (HACCP). The food business operators may
use this guide as an aid to compliance with the obligations under the Hygiene
Regulations.
The OHSA strives to be actively involved in the preparation and dissemination of
information on OHS matters to all interested parties. Such information includes Codes
of Practices on a number of areas including construction safety, the safe use of
Asbestos Containing Material and the safe use of lifting equipment. It has also
prepared simple pictorial checklists which explain the legal obligations in a simplified
manner so as to facilitate compliance. Recently the OHSA has issued a guidance book
on noise at work and also various publications on how to carry out a risk assessment at
work according to statutory requirements.
Licensing
The need for this option needs careful consideration as it tends to absorb
available resource in processing applications of compliant stakeholders rather
than targeting resource at the actual problem to be addressed.
Use of ‘Sunset’ and ‘Review’ clauses
Providing for a regulation to lapse after a period of time or for its review can
provide a useful prompt to revisit to see if it remains necessary or has
delivered the intended outcome.
Often techniques may be used in combination to deliver required
outcomes.
- 38 -
3 B.
Assessment of the options
The available information and evidence should be scored against the better
regulation principles, outlined in Part A of the manual, for each option.
STEP 4 – Develop the preferred policy
Once the goal and policy direction has been agreed it is then necessary to
work on the detail and to test the evidence and assumptions on which it is
based.
A team approach with regular meetings involving a broad range of
stakeholder interests including colleagues responsible for enforcement and
colleagues in other areas of the public administration is extremely beneficial
to getting the policy right. Flexibility to respond to fresh ideas and
approaches should be retained.
Informal consultation with stakeholders likely to be impacted is again critical
to success at this stage, and the more information of the issue that can be
gathered from as many sources as possible the better.
Ideas and ways of implementing them should be discussed in detail with key
stakeholders and valid ideas, objections and suggestions should be taken on
board wherever possible.
Pilot testing of ideas with reliable stakeholders can be an effective technique
– subject to practical and legal constraints.
If a material change of direction emerges, the scoring process in Step 3
should be reapplied.
STEP 5 – Carry out consultations
Once we have a clear idea of what is the goal and strategy to get there, it is
essential to test the ideas that have been developed in a more formal way.
Consultation means really obtaining the considered views of those impacted
and not just ‘going through the motions’. As a small island and tight knit
community finding out what stakeholders really think should be one of our
strengths. Any tendency to say ‘ they won’t be interested – we never get any
feedback from them – why bother or we know the answers already’ must be
avoided.
- 39 -
If the current situation and proposed action has been developed properly a
broad consensus and endorsement may result.
Often when presented in black and white concerns that may not have been
voiced during informal discussions emerge as interested parties start more in
depth engagement with their constituent stakeholders and begin to realise
potential impacts.
Although consultation is not obligatory in Malta, it is widely practiced.
Consultation is enshrined in Government’s modus operandi when introducing new
policies or legislation. Some examples of consultation exercises carried out by
Government include the consultations on the Pre-Budget Documents, Pensions
Reform, Services Directive, Construction Site Regulations and more recently on the
Rent Reform.
The MFSA is proactive towards the needs of the industry. In this regard
proposals to regulations and rules issued by the MFSA are subject to consultation with
stakeholders and the public in general. All consultation documents are placed on the
website and publicised in the monthly newsletter. Any feedback is evaluated and
included in the proposals for amendments.
5 A.
Methods of consultation
Care needs to be taken to ensure that a representative view of those impacted
is obtained and that input is not distorted by vocal and organised lobby
groups. As the purpose of a consultation is to take on board feedback on
proposals it is essential to carefully reflect on all information received.
To change a proposal following consultation is a good and positive thing and
does not necessarily imply that earlier work was flawed.
- 40 -
Consultation paper (available on web site, by email or post)
Interested parties meetings
Care needs to be taken that a general invitation is made and thus no group is able to
claim apparent exclusion or that vested interests have had undue influence.
Public open invitation meetings
Restricted to matters of general interest and importance to the general population
and generally not appropriate for minor regulatory matters involving trade
stakeholders.
Telephone surveys
These should normally be carried out by a statistically random sampling process.
Focus groups
This is a technique that should be used in circumstances where it would otherwise
prove difficult to obtain high quality feedback. This would normally be used for policy
issues affecting consumers in general or particular groups within the community. Care
needs to be taken to ensure the fully representative nature of such groups and the
objectivity of the facilitator.
Full consideration should be given to minimising potential burdens
highlighted by stakeholders.
Even at this point a decision to maintain the status quo if that appears the
best course following consultation would be the right approach.
5 B.
Who should be consulted?
Each Ministry / Regulatory Body should maintain a consultation list
including all its key stakeholders. The ability to be included on the list should
be made known either through the web site or when in contact with
stakeholders over relevant issues. The list must be kept up to date and
stakeholders removed when no longer interested.
Stakeholders include:
anyone who is directly impacted by the proposed regulation; and
other Ministries and Regulatory Entities - on whose activities the
regulation will have some impact.
- 41 -
5 C.
Characteristics of effective consultation
Goes to the right people
Summarises the nature of the proposed change
Highlights consideration of alternative options and seeks views on them
Explains what those targeted will have to do and by when
Includes an assessment of likely costs to stakeholders
Asks for responses to specific numbered questions
Provides a variety of means for response
Should state that responses will be published unless otherwise requested
Gives a contact name, address and telephone number for more information
Gives sufficient time for response and a clear closing date.
Consultation documents should have a standard content layout and include
the following information:
Executive Summary
Explanation of proposals and timescales
A numbered list of questions
Annex A: The 6 Better Regulation Principles
Annex B: Organisations being consulted
Annex C: EU requirement (if applicable)
Annex D: Impact Assessment / Legal Notice Checklist
Annex E: The proposed measure
Annex F: Guidance (if to be used)
In the UK a standard approach to providing detailed information on any
regulatory proposal has been adopted. Whilst this is not Government policy to require
this it does provide an indication of the level of information and detail that may often be
required to confirm that the proposed measure is in line with the Better Regulation
Principles. An example of an impact assessment for a proposed regulation to
implement and EU ruling on a specific toy safety issue is available at:
http://www.berr.gov.uk/files/file45493.pdf
- 42 -
STEP 6 – Review draft policy and prepare implementation plan
6 A.
Analysing the results
Following a consultation exercise all feedback received should be collated
together with the government response to each comment or theme of input
received depending on their number.
Care must be taken to summarise responses accurately and it is best practice
to seek clarification from the stakeholder if any aspect of a response is
unclear.
It is not necessary to reply directly to those who respond other than possibly
to send an acknowledgment and thank you note.
The collated feedback and government response should be published in the
same manner in which the consultation exercise was carried out.
If the proposed course of action is to change significantly following the
consultation then it is best practice to issue a further consultation to validate
that stakeholder views remain valid. This is only required if the changes
would potentially add additional burdens.
The regulatory policy maker has a key responsibility to ensure that the output
of any legal notice accurately reflects the policy need and that the intent has
not been distorted or lost in legal translation.
6 B.
Transparency
All requirements must be written in straight forward simple language,
avoiding ambiguity and uncertainty to make them understandable and
accessible.
‘Technical’ regulators can often seriously over estimate the capability of their
stakeholders to understand what it is that they need to do.
Sense checking understanding and interpretation with non technical
colleagues should take place.
Great care must be taken to ensure that the same meaning is conveyed in
both Maltese and English.
- 43 -
6 C.
Use of guidance
Characteristics of effective guidance:
Clear
Simple language
Comprehensive
Unambiguous
Short
Action oriented – what to do
Step by step approach
Include contact point for further information
Guidance should be produced where a requirement might not otherwise be
completely transparent and accessible. Non lawyers will normally not find
copies of legislation on their own particularly helpful.
Care must be taken to ensure that guidance does not in fact suggest
obligations that go beyond or ‘gold plate’ the regulatory requirement. It is
very easy to do this inadvertently through developing too close an attachment
to the policy area or outcome.
Guidance should generally be consulted on at the same time as the principal
requirement so that the stakeholder can see both the proposed regulation and
the proposed guidance at the same time.
Whilst it is useful to give examples of how compliance might be achieved
care needs to be taken that this is not understood by stakeholders as
specifying the manner in which the goal must be reached.
The aim of the guidance is to get the message across as quickly and
effectively as possible. It must avoid being seen as a political statement or go
too far in justifying why the policy has been implemented in the manner that
it has.
Guidance should be available at an early stage following finalisation of
requirements in order to be of real value to stakeholders seeking assistance.
Often guidance will save businesses time and /or avoid their needing to buy
in additional professional support.
- 44 -
STEP 7 – Obtain Approvals and clearance
The required approvals are outlined in Part B on Simplification of
Regulations and Procedures Step 6.
STEP 8 – Communicate policy changes
If a regulatory initiative is to be implemented successfully to deliver the
desired outcome efficiently then it needs to be communicated in a very clear
and effective way.
The characteristics of effective communication and information on how to
prepare a communication plan are outlined in Part B on Simplification of
Regulations and Procedures Step 7.
STEP 9 – Implement and monitor progress
The policy is then to be implemented and the progress is to be monitored.
Things which should be taken into consideration in Implementation and
monitoring are outlined in Part B on Simplification of Regulations and
Procedures Step 8.
STEP 10 – Review
Regulatory policy development is not a one off task or a linear process
leading from policy idea to implementation but a circular process involving
continuous learning, adaptation and improvement.
It is important to build ongoing monitoring and review mechanisms from the
outset. This will assist in identifying problems at an early stage allowing
remedial action to be taken in time. Moreover a build-up of knowledge
acquired should be retained to assist in future considerations and decisions
The following sources of information are of value in judging the success or
otherwise of regulation and should be reviewed informally on an ongoing
basis.
- 45 -
Indicators to judge whether a regulation is working
Levels of compliance
Feedback from enforcing body
Level of court actions
Ombudsman and umpire decisions
Complaints
Media articles
Parliamentary questions
Costs (Standard cost model)
Satisfaction questionnaire
Telephone surveys
Trade and other representative bodies
NGO’S
Assessment of quality charter performance
Information arriving with the Ministry Customer Care coordinators and from follow
up investigations.
Often overly bureaucratic and burdensome regulation becomes the accepted
norm and is not readily apparent. For this reason in addition to considering
the above information sources formal proactive reviews are needed at least
every five years to identify instances where this may have occurred.
- 46 -
PART D - THE STANDARD COST MODEL
D 1.
Overview
The Standard Cost Model (SCM) provides a means for estimating the
administrative costs to business caused by the manner in which regulations
are applied. The SCM does not measure the policy cost imposed by a legal
measure but only the administrative costs associated with it.
For example if a rule was made to ban a certain refrigerant gas used in air
conditioning units the cost of understanding and communicating the
requirement within a business and of reporting to the public administration
on completion would be included but not the actual cost of replacing the
refrigerant or the cost of the new refrigerant used.
Adopting a standardised method for estimating administrative costs enables
the cumulative impact of administrative burdens to be calculated by
regulatory area, government department and regulatory body.
Knowing where there are high levels of administrative burden enables target
setting and provides a sound basis for prioritisation of activity to reduce
them.
The SCM has been adopted by the EU and increasingly by Government’s
world wide as a means to quantify administrative costs resulting from
regulation.
Although this section is focused on the reduction of burden on the business
sector, the SCM can also be used / adapted to measure the reduction of burden on
citizens. The steps are similar to those explained in this section with the exception of
Step 3 and 7. The administrative burden on citizens is not always measured in
monetary terms. Some countries opt out to measure the burden in terms of Time
only. More information can be obtained from:
http://www.whatarelief.eu/publications/standard-cost-model.
D 2.
Summary of methodology
In order to determine the administrative tasks and the corresponding costs
necessary to comply with the regulatory requirement the following is to be
considered:
- 47 -
1.
The administrative cost (wages and other costs) needed to complete
these tasks are calculated with the assistance of businesses affected.
2.
The administrative cost figure is then multiplied by the number of times
each year that the cost would be incurred by a business subject to the
regulation.
3.
The resulting figure is then multiplied by the best estimate available of
the number of businesses which are covered by the regulation.
Administrative cost X Number of times per X
to meet requirement
year required
D 3.
Number of
businesses
= SCM
Admim burden
Worked example (Example 1)
If the administrative costs associated with making a statistical return to a
government department were €1000 and returns were required every three
months and 2500 businesses were required to make the returns the SCM
would be as follows:
€1000 x 4 x 2500 = €10,000,000 SCM Administrative burden
D 4.
Step by step guide to SCM Methodology
The process can be broken down into the following sequential steps:
STEP 1 - Identify what the regulation requires
STEP 2 - Identify the actions required to meet the obligation
STEP 3 - Calculate the administrative cost per cycle
STEP 4 - Determine the number of cycles per year
STEP 5 - Determine the number of businesses subject to the regulation
STEP 6 - Calculate the SCM administrative burden figure
STEP 7 - Deduct business as usual costs
STEP 8 - Record corrected SCM administrative burden
- 48 -
STEP 1 – Identify what the regulation requires
Regulation for the purposes of the SCM is defined as all measures with legal
force set by central government.
It is necessary to identify within a regulation to be measured each individual
‘information obligation’ or administrative action that someone is required to
undertake.
The following is a list of information obligation types:
EU code
Type of obligation
B1
Notification of (specific activities)
B2
Submission of (recurring) reports
B3
Information labelling for 3rd parties
B4
Non labelling information for 3rd parties
B5
Authorisation or exemption for particular task
B6
Application for general authorisation e.g. licence
B7
Registration (entry in a business register or professional list)
B8
Certification of products / processes
B9
Inspection (e.g. monitoring the conditions of employees
B10
Cooperation with audits / inspections
B11
Application for subsidy or grant
B12
Other
- 49 -
STEP 2 – Identify the actions required to meet the obligation
Having identified what the required action is it is then necessary to go
through the following headings to identify what a business would need to do
to meet the obligation identified.
EU Code
Required actions
B1
Familiarising with the information obligation
B2
Training members and employees about the information obligations
B3
Retrieving relevant information from existing data
B4
Adjusting existing data
B5
Producing new data
B6
Designing new information material (leaflet conception)
B7
Filling in forms and tables
B8
Holding meetings (internal and with external consultants)
B9
Inspecting and checking (inc assistance to inspection by public authorities)
B10
Copying (reproducing reports, producing labels and leaflets)
B11
Submitting the information (sending it to the relevant authority etc)
B12
Filing the information
B13
Other
STEP 3 – Calculate the administrative cost per cycle
Having worked out what the requirement is and what administrative tasks a
business of a particular type needs to do to meet the requirements it is then
necessary to estimate the average costs businesses will incur.
This is done by means of going through each of the above headings with a
sample of businesses and asking them for their estimates of the costs
incurred, time taken and grades of the personnel involved in meeting the
requirement. The intention is to get as accurate a picture as possible of the
costs incurred by the ‘normal business’.
- 50 -
In order to get a clear picture of the costs involved at least four businesses
are usually approached.
If the costs and other figures ‘sampled’ are broadly similar then the cost
per cycle figures would be accepted.
If there was no general consensus on the levels of cost incurred then
further survey work would be required.
If only one business in the group differed significantly in its cost
estimates this result might be discounted and the remaining figures
accepted as the ‘representative sample’.
In estimating the time taken to complete a requirement in addition to the
wage cost an overhead figure of 30% should also be applied to take account
of premises, employment and other costs that the business will be incurring
as a result of employing the staff concerned.
SEGMENTATION – Moreover, if it transpires that businesses are affected
in different ways by a requirement such that they are likely to incur
significantly different levels of cost then businesses should be segmented and
the cost should be worked out for each group of businesses affected in a
different way.
This can be particularly a factor of size with small and micro enterprises
having significantly different costs from larger businesses.
STEP 4 – Determine the number of cycles per year
The step of calculating how often this obligation is required is often quite
straight forward e.g. for a report required every three months the number of
cycles per year would be 4. For a monthly report the number of cycles would
be 12.
For ‘one off’ costs such as familiarisation with a new requirement the
frequency would be 1 only for the first year in which the requirement applied
only.
For costs incurred resulting from inspections then estimation based on
previous inspection data for the sector concerned should be used e.g. if twice
the number of inspections had been made in the previous year to the number
of premises liable to inspection the frequency would be 2.
- 51 -
STEP 5 – Determine the number of businesses subject to the
requirement
For all calculations 100% compliance with the regulation must be assumed
i.e. that all businesses will comply with the regulation and thus will all be
incurring the cost in meeting the requirement.
Published statistical data is one of the potential sources to identify the
number of businesses subject to each obligation.
A level of accuracy of plus or minus 20% is acceptable. In the absence of
local statistical figures, data associated with similar obligations and EU
reporting requirements can be used.
Where there has been a need to segment the population affected by the
requirement due to different compliance costs it will be necessary to
accurately estimate the numbers of businesses in each segmented category.
STEP 6 – Calculate the SCM Administrative burden figure
Multiply the resulting figures from steps 3, 4 and 5 to arrive at the
standardised administrative cost burden of the information obligation in
question.
Administrative cost
to meet requirement
X
Number of times per
year required
X
Number of
businesses
= SCM
Admim burden
STEP 7 – Deduction of ‘business as usual’ costs
Any business as usual costs must be deducted from the SCM figure. These
are costs following discussions with stakeholders that the business would still
incur for its own purposes even if the legal obligation were no longer in
force. For example if the business would still collect the data concerned for
marketing or internal control purposes.
- 52 -
STEP 8 – Record corrected SCM administrative burden data
Each Ministry and Regulatory body must maintain a record of the SCM
measured for the key Administrative burdens for which it is responsible
together with the data on which they are based.
All data must be related to the base year in which the measurement was
carried out.
For future measurements and use of data for comparative purposes standard
correction factors for movements in wage and other costs will need to be
applied.
Administrative burdens must be recorded net of business as usual costs that
would be undertaken by businesses even if the requirement was not in place.
D 5.
Standard Cost Model – Example 2
If a new requirement were to be introduced requiring all tourism businesses
to submit a return to the tourism authority of the number of overseas guests
staying in each hotel or guest house, the duration of their stay and of the total
amount they spend on a monthly basis.
The Standard Cost Model administrative burden would be calculated as
follows.
STEP 1 – Identify what the regulation requires
The regulation requires the number of overseas guests, the duration of their
stay and the total amount they spend to be reported to the tourism authority
on a monthly basis.
Information Obligation of Type B2 - Submission of a recurring report
- 53 -
STEP 2 – Identify the actions required to meet the obligation
The following actions are required:
B1 Familiarising with the information obligation
B2 Training employees about the information obligation
B3 Retrieving relevant information from existing data
B4 Adjusting existing data
B5 Producing new data
B7 Filling in forms and tables
B8 Holding internal meetings
B9 Inspecting and checking
B10 Copying
B11 Submitting the information
B12 Filing the information
B13 Other – software upgrades
STEP 3 – Calculate the administrative cost per cycle
It is vital to first establish whether the impact on larger businesses would be
different from small.
Given that the larger businesses operate sophisticated data base systems it is
reasonable to conclude that there is a need for segmentation between large
and small businesses. This would need to be tested by speaking with a
number of businesses.
Whilst the data would be obtainable by the businesses, it may not be readily
available in the form required at the present time so significant costs are
likely.
It is only possible to estimate these costs by discussion with a selection of
businesses from each segment taking them through each of the above
headings.
- 54 -
For the purpose of the calculations used below the following remuneration
rates were assumed:
Clerical employee
€7 per hour
Senior Manager
€15 per hour
Director large business
€30 per hour
Small business owner
€15 per hour
The conclusions may well be as follows:
Large Businesses
Following software upgrades there will be little ongoing burden providing
electronic reporting is allowed.
Step
Description of step
One Off Costs
B1
Familiarisation
B1
Familiarisation
B2
Training
B2
Training
B8
Internal meetings
B8
Internal meetings
B8
Internal meetings
OVERHEAD 30%
B13
Software upgrade
TOTAL COST
Costs per Cycle
B9
Insp and checking
B10
Copying
B11
Submitting
B12
Filing
OVERHEAD 30%
TOTAL COST
Who
Cost per
hr
Hours
Total
Total Cost
Nature of cost
8 Directors
1 Senior Man
1 Senior Man
6 Staff
1 Director
1 Senior Man
6 Staff
€30
€15
€15
€7
€30
€15
€7
8
2
4
2
2
16
16
€240
€30
€60
€112
€60
€240
€136
€263
€5000
€6141
One off
..
..
..
..
..
..
..
..
..
..
..
..
€3.75
€0.56
€0.56
€0.56
€1.63
€7.1
Per cycle
..
..
..
..
..
..
€5000
1 Senior Man
1 Staff
1 Staff
1 Staff
€15
€7
€7
€7
- 55 -
0.25
0.08
0.08
0.08
..
..
ONE OFF
PER CYCLE
Small Businesses
It is anticipated that many small businesses would use a manual reporting
route at least initially.
Step
Description
One Off Costs
B1
Familiarisation
B2
Training staff
B2
Training staff
OVERHEAD 30%
Who
Cost per
hr
Hours
total
Total cost
Nature of cost
Business owner
Business owner
2 Staff
€15
€15
€7
4
4
4
€60
€60
€56
€53
One off
One off
One off
One off
€229
ONE OFF
€14
€14
€14
€7
€7
€3.5
€0.56
€0.56
€0.56
€18.4
€79.5
Per cycle
Per cycle
.. ..
.. ..
.. ..
.. ..
.. ..
.. ..
.. ..
TOTAL
Costs per Cycle
B3
Retrieving data
B4
Adjusting data
B5
Producing new data
B7
Filling forms / table
B8
Internal meetings
B9
Inspect/ checking
B10
Copying
B11
Submitting
B12
Filing
OVERHEAD 30%
TOTAL
1 Staff
1 Staff
1 Staff
1 Staff
1 Staff
1 Staff
1 Staff
1 Staff
1 Staff
€7
€7
€7
€7
€7
€7
€7
€7
€7
2
2
2
1
1
0.5
0.08
0.08
0.08
PER CYCLE
STEP 4 – Determine the number of cycles per year
Monthly reporting is required so the frequency is 12.
STEP 5 – Determine the number of businesses subject to the
Regulation
Assuming that all hotels and guest houses are subject to the reporting
requirement the number of businesses affected would be as follows:
Large
Small
300
2500
STEP 6 – Calculate the SCM Administrative burden figure
For year one:
Large businesses
One off cost x
(€6141)
x
number of businesses
(300)
=
€1,842,300
Per cycle cost x
(€7.1)
x
Frequency
(12)
=
€25,560
x number
x (300)
- 56 -
Small businesses
businesses
One off cost
x
(€229)
x
Number of businesses
(2500)
=
Per cycle cost x
(€79.5)
x
Frequency
(12)
= €2,385,000
x number
x (2500)
€572,500
TOTAL SCM COST – YEAR 1
= €4,825,360
TOTAL SCM COST – YEAR 2 ONWARD
= €2,410,560
STEP 7 – Deduction of ‘business as usual costs’
For the purposes of this example let us say that discussions with stakeholders
have led us to the conclusion that small businesses would already produce
half of the required data for their own purposes even if this was not legally
required.
For example 50% of the small businesses may be recording how long persons
of each nationality stay with them and what they spend for determining the
profit derived from each source of business and therefore how to market
their business.
In the example given, this might reduce the time spent actually spent in
complying with the new requirement as follows given that the time would be
allocated to this activity by the business even if this were not legally required.
Total small business cost per cycle as depicted in the example above is €79.5
per cycle.
Estimated business as usual elements – small business
B3
Retrieving data
1 Staff
€7
1
€7
Per cycle
B4
Adjusting data
1 Staff
€7
1
€7
Per cycle
B5
Producing new
data
1 Staff
€7
2
€7
..
OVERHEAD 30%
€6.3
TOTAL COST
€27.3
€27.3
..
PER CYCLE
The business as usual cost for small business of €27.3 per cycle would then
be deducted from the total small business cost per cycle.
- 57 -
Corrected small business costs:
TOTAL COST -
€79.5
PER CYCLE
BUSINESS AS USUAL =
€27.3
..
..
CORRECTED SCM
€52.2
..
..
STEP 8 – Record corrected SCM administrative burden
It is the administrative burden figure net of business as usual cost that must
be declared for SCM purposes as this is the additional administrative burden
resulting from the regulation being in place.
Corrected SCM admin burden after deduction of business as usual costs
Large businesses
Per cycle cost x
(€7.1)
x
Frequency
(12)
x
x
number
(300)
=
€25,560
Small businesses
Per cycle cost x
(52.2)
x
Frequency
(12)
x
x
number
(2500)
=
€1,566,000
Total SCM cost per annum (excluding business as usual costs) = €1,581,560
D 6.
Using the standard cost model to evaluate policy options
Amendment to either the cost per cycle, the number of cycles per year or the
number of businesses subject to a requirement will affect the total
administrative burden.
Using the above example look at the impact of making the following changes
to the requirement presuming that it has now been in force for more than a
year.
Option 1 - Reducing reporting frequency to two monthly
Per cycle cost x
Large (€7.1)
x
Small (€52.2) x
Total SCM burden
number of cycles x number of businesses
(6)
x
(300)
= €12,780
(6)
x
(2500)
= €783,000
= €795,780
48.7%
48.7% reduction
- 58 -
Option 2 - Reducing reporting frequency to six monthly
Per cycle cost x
Large (€7.1)
x
Small (€52.2) x
Total SCM burden
number of cycles
(2)
(2)
x
number of businesses
(300)
(2500)
=
€4,260
= €261,000
= €265,260
83.2% reduction
Option 3 - Exempting small businesses from the requirement
Per cycle cost x number of cycles
Large (€7.1) x
(12)
Total SCM burden
x
number of businesses
(300)
= €12,780
= €12,780
99.2% reduction
The biggest impact will be seen where numbers are largest so any significant
reduction in the numbers of businesses subject to a requirement will deliver
the greatest potential administrative burdens reductions. For this reason
requirements impacting small firms should normally be a high priority.
D 7.
Contribution of simplification measures to achievement of
burdens reduction targets
If a Ministry or Regulatory body has a target to reduce its administrative
burden by 15% by 2012 and its total administrative burden has been
measured by the SCM and found to be 25 million euro per annum this
represents the base line from which reductions are measured.
If a saving in administrative burden measured by the SCM by implementing a
simplification measure, such as the example given, saves €1.5 million per
annum then this would equate to 6% of the total administrative burden for
the department.
A 6% reduction in the departments total administrative burden represents
40% of the progress towards achieving the overall departmental 15%
administrative burden reduction target.
The data and assumptions surrounding measurement of cost savings from
simplification measures must be recorded and retained for national and EU
audit purposes.
- 59 -
Appendix 1 – Legal Notice Checklist
1. General
a.
Proposed legal notice title and Act in
virtue of which it is being proposed
b.
Objectives
c.
Scope
d.
Compelling reason for publication
e.
LN does not go beyond the Directive’s
minimum requirements.
f.
In view of the cogent reasons amply
indicated herein, the LN provisions
go beyond the Directive’s minimum
requirements
detailed exposition with respect to each additional burden
2. Drafting exercise
Yes
No
If yes,
a.
Were stakeholders
consulted?
list main stakeholders (other Ministries, social partners, organisations, NGOs,
general public etc)
b.
Was a regulatory
impact
assessment
carried out?
list the main findings
- 60 -
3. Impact
Yes
No
If yes, what impact and on whom?
3.1. Impact on Private
Sector
a.
Are there any
envisaged new or
increased
burdens?
b.
Are there any
procedural or
administrative
impacts?
3.2. Impact on Government
Financial, procedural, administrative
Do the proposed
provisions have a
bearing on other
Ministries, Departments,
Authorities, Entities
etc.?
a.
Economy / employment
Education
Environment
Gender equality
Social Development
Gozo
Do proposals
impact
Government
priorities and
mainstreaming
policies?
If “yes” comment briefly
as to how
- 61 -
3. Feedback
a.
Was there
feedback from
Govt.
departments
during
consultation
phase?
Yes
No
If “yes” comment briefly
as to feedback received
If “no” explain briefly
efforts made to obtain
feedback1
b.
Was there
feedback from
private sector
departments
during
consultation
phase?
If “yes” comment briefly
as to feedback received
If “no” explain briefly
efforts made to obtain
feedback (see footnote
above)
4. Outcomes
a.
List expected positive outcomes
b.
List expected negative outcomes
c.
In case of negative impact, list
planned mitigation measures
5. Deadline for publication
6. Notes
____ / ____ / ________
Deadline due to
EU commitment National Agenda _____________________ _____________________________
___________________________
Date
1
There should be at least one communication followed up by at least one reminder duly documented
- 62 -