A third of regulators haven’t been scrutinised by parliament – this needs to change

The role of regulators will not feature prominently on the doorstep at the general election. People are more concerned about issues such as energy bills and sewage and healthcare. But regulators, like Ofgem and Ofwat and the Care Quality Commission, play an important part in all of these issues, whether through setting standards, monitoring performance, or enforcing rules. But are they doing their jobs properly? Are they properly scrutinised? And if not, what should change? These questions have been vexing parliamentarians – and the answers impact the public. Our latest research takes a fresh look at parliament’s role in scrutinising regulators – and our findings are a cause of some concern.

Regulators already get a lot of scrutiny – the worry is democratic oversight 

There is already quite a lot of oversight of public bodies generally, and regulators specifically. Government departments set budgets, oversee governance and review performance. Ministers appoint board members and – to the extent statute permits – set regulators’ objectives. The NAO, tribunals, judicial review, ombuds, and Freedom of Information requirements all bite, too. 

So what’s the problem? Despite this lengthy cast list of scrutineers, some parliamentarians are concerned about a lack of democratic oversight of regulators, particularly as some have taken on new and expanded roles since Brexit. And problems in utilities, public services and the wider economy can seem harder to solve when the levers are not under politicians’ direct control. To some extent, this is a problem for ministers, not parliament. But greater ministerial authority comes with its own problems and can’t be the whole answer, both because some regulators oversee the work of ministers and because ministerial micro-management of everything is as unrealistic as its parliamentary equivalent. So what could parliament do differently?

Parliamentary oversight of regulators is patchy at best

New data in our report reveals the role parliament is currently playing and, for the first time, sets out how often regulators appear before parliament for scrutiny. The results are worrying: almost a third of regulators – 35 of the 116 we identified – have not been scrutinised by parliament at all since the last election. Of the 81 that have, a clear majority have only been scrutinised in response to a specific issue, leaving less than a third of the total receiving general scrutiny of their objectives and performance by parliament.

In some cases, it is smaller regulators that parliament overlooks. But not always. Social Work England, for instance, has not been seen. And even among high-profile regulators, there is considerable variation – the Food Standards Agency has been seen on three occasions in this parliament, but the Financial Conduct Authority has been seen more than 10 times as often (36 appearances so far). 

These numbers are not encouraging, but the problems are solvable – and straightforwardly so. Firstly, parliament needs a list of regulators and a specific core task for select committees to scrutinise them – both currently lacking. With these in place, select committees should then see each regulator within their remit at least once per parliament, or if not, they should publicly explain why.

The oversight that does take place should improve

Our research also looked at the quality – as well as the quantity and coverage – of parliament’s oversight. We found that while parliament can respond effectively and powerfully to topical issues, its ongoing general scrutiny is left wanting. Committees can be poorly informed about how regulators work, and hearings can be poorly planned in a way that is overly weighted towards quick-fire “gotcha” questioning rather than sustained and constructive dialogue. Hearings are often set piece events with limited preparation or follow-up. This may make for good headlines, but much more could be achieved if trusting relationships were developed with regulators over time, with an ongoing dialogue on difficult issues.

It is not reasonable to expect elected politicians to have a detailed knowledge of all regulators in the system, so the support they receive is key. Some training is appropriate, and select committees should also be better resourced – but without allowing over-mighty secretariats to crowd out democratic oversight in practice. The Commons and Lords should work better together, aided by a Regulatory Oversight Support Unit operating across both Houses. And parliament should rely more explicitly on the work of others – particularly the NAO, which could do more to meet parliament’s expectations of regulatory scrutiny.

Regulators will not dominate an upcoming election campaign. But they could be central to delivering the next government’s policy agenda. Robust oversight is the basis of trust in the regulatory system. Parliament can’t do everything, but the start of a new parliament would be a good time for it to set both a different tone from the top and a much better example.