A major parliamentary watchdog has warned that the UK’s regulatory landscape has become too complex, inconsistent and difficult for businesses to navigate—risking investment, innovation and long‑term economic growth.
In a hard‑hitting report following its inquiry into “regulating for growth”, the Public Accounts Committee (PAC) urges government to consider more fundamental reform of the system, including the possible merging of regulators. The Committee also calls for clearer objectives to explain how regulation is expected to support economic growth in practice.
The findings will resonate across Whitehall and the wider public sector, particularly in heavily regulated areas such as health, environment and infrastructure, where organisations often interact with multiple oversight bodies.
A regulatory system marked by complexity and confusion
Evidence submitted to the PAC highlights widespread frustration among businesses operating across multiple regulatory regimes. Companies described unpredictable timelines, inconsistent interpretation of rules and unclear enforcement thresholds—all of which add cost, delay decision‑making and increase uncertainty.
In sectors such as environmental regulation, organisations may be required to engage with several regulators at the same time. The PAC found that this can result in duplication, delays, gaps in oversight and, in some cases, conflicting requirements.
While some departments are experimenting with a “lead regulator” model to improve coordination, the Committee concludes that incremental change may not be enough. It is calling on the Department for Business and Trade (DBT) to review how different regulatory models perform, including whether merging regulators could deliver a more streamlined and effective system.
Growth ambition undermined by lack of strategy
A central criticism of the report is the absence of a clear and shared understanding of what economic growth means in the context of regulation. Although ministers have repeatedly framed regulatory reform as a driver of growth, the PAC found little evidence of a coherent strategy to support this ambition.
HM Treasury currently defines growth broadly as an increase in GDP, but the Committee notes that there is no agreed timeframe, benchmark or set of supporting indicators. Nor has government explained how changes in regulatory behaviour—such as encouraging regulators to take more risk—are expected to translate into measurable economic outcomes.
Without clear metrics, the PAC warns, it will be impossible to judge whether regulatory reforms are working. The report calls for a defined time horizon for growth, supported by complementary indicators such as investment levels, productivity and sector‑specific performance.
Action Plan under scrutiny
The government’s March 2025 Action Plan was intended to reduce regulatory burdens, curb excessive risk aversion and stimulate investment. However, the PAC found that several key elements remain underdeveloped.
Officials were unable to offer clear examples of how increased regulatory risk‑taking would drive growth. Measures cited during the inquiry—such as reducing duplicative reporting requirements—were described by the Committee as administrative improvements rather than genuine shifts in risk appetite.
The report also highlights weaknesses in strategic policy statements issued to regulators. While these often list multiple and sometimes competing objectives, they do not consistently prioritise growth or explain trade‑offs in a meaningful way.
To address this, the PAC recommends that HM Treasury and DBT provide clearer guidance on risk appetite, ensuring regulators understand how their decisions are expected to contribute to economic outcomes.
Administrative burden reduction falling behind
The government has committed to cutting the annual cost of regulatory administrative burdens—estimated at £22.4bn—by 25% by the end of the current Parliament. However, the PAC concludes that there is no credible plan in place to meet this target.
Current measures are expected to deliver around £460m in savings, far short of the £5.6bn goal. The Committee warns that these gains could easily be offset by new regulatory costs arising from other legislation.
While a “small number of measures” could deliver the majority of potential savings, the report notes that government has yet to identify or prioritise them effectively. Departments are required to submit annual simplification plans, but many have failed to do so more than a year after the Action Plan was launched.
The PAC is calling for greater transparency and accountability, including a published list of interventions, expected savings and delivery timelines, alongside independent validation of reported savings.
Implications for health and public services
Although the inquiry focuses primarily on business impacts, its conclusions are likely to resonate across the public sector, including healthcare. The NHS and wider health system interact with multiple regulators, from the Care Quality Commission and NHS England to professional bodies and safety watchdogs.
Any move towards streamlining regulatory structures, adopting “lead regulator” models or pursuing mergers could have significant implications for inspection regimes, reporting requirements and system‑wide accountability. The PAC stresses that simplification must be carefully balanced with the need to maintain robust oversight, particularly where patient safety and quality of care are concerned.
PAC calls for stronger oversight and delivery
Sir Geoffrey Clifton‑Brown MP, Chair of the Public Accounts Committee, was critical of the lack of detail underpinning the government’s approach.
He said that despite the prominence given to growth as a policy objective, officials were unable to provide a clear explanation of how regulatory reform would achieve it or how success would be measured.
While the Committee supports the ambition to reduce burdens and promote investment, it warns that without a clear framework, defined goals and measurable outcomes, the current approach risks falling short.
To strengthen delivery, the PAC recommends the introduction of milestones, regular progress reporting and annual updates to Parliament. If progress stalls, departments should be given explicit targets to ensure accountability.
A system in need of fundamental reform
The report concludes that the UK’s regulatory system now requires more than incremental adjustment. With businesses continuing to describe it as burdensome and confusing, the PAC argues that a more fundamental rethink is needed—one that aligns regulatory activity with clearly defined economic goals.
Whether through clearer strategy, improved coordination or structural reform such as merging regulators, the Committee’s message is clear: without decisive action, regulation risks becoming a barrier rather than a driver of growth.
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