The Changing Regulatory Landscape

Isabel Nisbet, Acting CEO (isabel.nisbet@ofqual.gov.uk)26 November 2008

Outline

Regulation – the changing scene – Institutionalising the light touch – Self-regulation – a false dawn?– Professionalism – Goodbye to the light touch?– A way forward

Ofqual – the independent regulator of qualifications, exams and tests

Institutionalising the light touch

Nationalised utilities are privatised

Privatised utilities moderated by regulation

Challenge to the traditional professions – Law– Medicine

Reaction to the “regulatory burden” on industry – Better regulation task force (1997)– Hampton principles (2006) – Legislative and Regulatory Reform Act 2006 – Compliance Code 2007

Institutionalising the light touch

ProportionalityInterventions related

to risk Accountability

Consistency• In judgments made

• In data requests• In criteria used

Transparency• Open and visible

Targeting• Measures taken related to purpose

Setting the City free

“The better model of regulation is ... not just a light touch but a limited touch. We should not only apply the concept of risk to the enforcement of

regulation, but to ... the decision as to whether to regulate at all.”

Gordon Brown, 2005

Self-regulation

The universities– 2001: revolt against QAA subject-level inspections

“[John Randall] said that plans for light-touch quality assurance ….. would short-change students and employers and hurt public confidence in university standards…. The Association of University Teachers said “John Randall’s resignation marks the end of overly bureaucratic and prescriptive regulation in higher education”

The professions – Medicine– Nursing – The law– Teaching

Self-regulation (ctd)

Further Education – Sir George Sweeney – Single Voice – Learning and Skills Improvement Service – “Principles of self-

improvement”

The professions

Attempts to champion “professionally-led regulation”

Separation of functions

Overtaken by externally enforced, lay-run, regulation:– Legal Services Act 2007 (Legal Services Board – powers include

setting performance standards and targets; Office for Legal Complaints)

– Health and Social Care Act 2008 (new Office of the Health Professions Adjudicator; appointed GMC Council; “responsible officers” for local doctors)

– Highly critical review of NMC

The new professionalism (public service)

“Excellence and fairness” (Cabinet Office, June 2008)

Includes “professionals defining excellence”

“New professionalism … means maintaining high standards of service and performance, and strengthening user choice and voice, but at the same time providing space for the best pofessionals to design and run their own services.”

The case for joint working

Public interest in the self-respect and ownership of standards by the profession itself

– “The best guarantee of the public safety is the self-respect of the [medical] profession itself” (Merrison)

The reality of professionally-delivered public services – Most professionals are employed by the State and work in the eye

of Government – The “politics of the double bed” (Rudolph Klein)

Earned trust – the social contract

Then it goes badly wrong

More goes wrong

PM vows to prevent Baby P repeat The first pictures of Baby P were revealed on Friday

Gordon Brown has vowed to do everything in his power to prevent a repeat of the Baby P abuse case.

The prime minister rejected Tory claims of "buck-passing" after it emerged that a whistle-blower had raised concerns about Haringey Borough Council.

Baby P's natural father said the process had been "very traumatic", adding: "I loved him deeply."

Baby P died aged 17 months following abuse. His mother and two men were convicted of causing his death.

The alleged failings were investigated by the Commission for Social Care Inspection (CSCI).

The banking crisis

“Few dispute that the whole concept of “laissez-faire” financial regulation has failed. Stephen Green, chairman of HSBC, has described the model as ‘bankrupt’. Even Alan Greenspan, the former US Federal reserve chairman and arch-exponent of the ‘light

touch’ has admitted his ‘world view’ was wrong.” (Daily Telegraph)

What Adair Turner said

“[The crisis] frees one from the danger that one is going to be criticised in that over-sloganised way [“red tape”, “over-regulation”]…. We are now in a different environment. We shouldn’t regulate for regulation’s sake but over-regulation and red tape has been used as a polemical bludgeon. We have probably been over-deferential to that rhetoric.”

So whither risk-based/principles-based regulation?

A way forward

Principles can be tough

“There’s nothing light or soft about the use of principles. Indeed, I’d remind anyone so misguided as to believe that principles are less demanding than rules, that principles confer flexibility on the regulator” (Callum McCarthy, former Chair of FSA)

Set and police firm boundaries

Drilling down is okay – but must be justified

Risk regimes can be high as well as low

Learn how to learn from crises

Primary, secondary and tertiary prevention

Mix and match from the repertoire of regulatory instruments

Christopher Hood’s four types of control

Contrived randomness Oversight

Competition Mutuality

A way forward

Principles can be tough

“There’s nothing light or soft about the use of principles. Indeed, I’d remind anyone so misguided as to believe that principles are less demanding than rules, that principles confer flexibility on the regulator” (Callum McCarthy, former Chair of FSA)

Set and police firm boundaries Drilling down is okay – but must be justified Risk regimes can be high as well as low Learn how to learn from crises Primary, secondary and tertiary prevention Mix and match from the repertoire of regulatory instruments Loose-tight controls (Peters & Waterman)

About Ofqual

Independent of Government and QCA– Will report to Parliament

To ensure standards and confidence in qualifications, exams and tests

Conceived by Ed Balls in September 07

Launched (in shadow form) in April 08

Legislation in 08-09 session

Meantime distinct part of QCA

Our mission as a regulator

Regulate awarding bodies, qualifications, examinations and National Curriculum Assessments effectively to ensure that the qualifications market is fit for purpose, that qualifications are fair, that standards are secure, that public confidence is sustained, and that Ofqual acts as the public champion of the learner.

Ofqual’s strategic priorities for 2008-09

Maintain standards in existing, new and revised qualifications and assessments

Recognise Professional Bodies that are fit to be in the national system and make sure that they are effective

Secure an effective and efficient qualifications market

Act in the public interest when things go wrong

Promote and sustain confidence in the regulated system

Establish and run an effective and visibly independent interim regulator, within QCA

The Reliability Project

How much variability in results is acceptable? – Same learner on different occasions – Different markers

Are our expectations realistic?

Technical strand

Public debate

Conclusions

Challenge to regulatory orthodoxy

Need for VERSATILE REGULATION

Regulators and professionals should work together

OFQUAL – independent regulator of qualifications, exams and tests

Shining a light on the public debate

Intelligent crisis management