techUK news and views
18 Mar 2025

HMT: New Approach to Ensure Regulators and Regulation Support Growth

The Treasury has unveiled a new approach to regulation and regulators, which pledges to “cut red tape and kickstart growth”. The cross sectoral plan includes 60 commitments from the UK’s major regulators targeted towards boosting growth, which HMT estimates will save billions of pounds through reducing the number of regulators, streamlining their remits and reducing complexity in the regulatory system.

The Action Plan has been based on feedback from businesses, who reported that regulation was too complex, often duplicative, uncertain and unpredictable. These conditions were stifling growth through imposing considerable burdens on businesses to comply and undermining business confidence. In addition, respondents argued the regulatory system had become too risk averse, as opposed to agile and well equipped to adapt to evolving business conditions and emerging industries.

Based on these three key areas of feedback, the report is divided into three ‘Actions’:

Action 1: Tackle Complexity and the Burden of Regulation

HMT have committed to cutting the administrative costs of regulation for businesses by 25% by the end of the Parliament. The report outlines two key actions to help support this ambition:

  1. The Government will establish a baseline for the administrative costs of regulation. Initially, this will be approached through a baselining exercise to ascertain the current cost of regulation and identifying where it can be reformed.
  2. A regulation reform programme, targeted towards removing or streamlining administrative processes. The finalised Industrial Strategy will outline a “suite of reforms” across the growth-driving sectors. 

Action 2: Reduce Uncertainty Across Our Regulatory System

The Government has committed to working with the regulators to provide clarity on their roles, approach and processes. There are several key areas of focus for this Action:

  • Duties and Roles: Simplifying the duties and roles of regulators, to ensure they can best support growth and investment. For example, the Economic Secretary to the Treasury, Emma Reynolds, will look into whether the Financial Ombudsman Service is currently delivering its role as an impartial dispute resolution service.  
  • Transparency and Performance: The Government now expects regulators to:
     
    1. Publish clear and time-bound targets for processing authorisations, alongside how they perform against these targets.
    2. Stress-test these targets with industry to ensure they are sector appropriate.
    3. Ask stakeholders how they can improve their service and draw upon action plans to do so. The regulators must update the Government on this by June.

For instances where there is a need to expediate decisions, the Government has also committed to working with regulators to identify process improvements, such as paid for “fast lanes”.

This Action also contains three sector specific case studies:

  • Environmental Regulation: The Government will use the upcoming Corry Review to advance packages of reform, which could include legislation to improve environmental regulation.
  • Competition: Next steps to ensure the CMA fulfils its 4Ps (pace, predictability, proportionality and process) include:
    1. The upcoming finalised new growth-focused strategic steer.
    2. An upcoming consultation on legislative reform proposals to improve the pace, predictability and proportionality of the UK’s competition regimes. This will include proposals to provide certainty on where mergers will be subject to investigation.
    3. Continuing work to apply the 4Ps across the digital markets regime.
    4. Considering introducing measures to support the CMA’s existing work to review the markets regime to improve the 4Ps.
  • Financial Services: The Government will establish a concierge service to support foreign firms navigating the UK regulatory landscape, and a package of measures will be introduced to assist the FCA’s work to support early-stage innovative firms to start conducting regulated activities.

Action 3: Challenge and Shift Excessive Risk Aversion in the System

To ensure the actions of regulators are proportionate, i.e. strike the right balance between consumer protection and growth, there needs to be a more consistent approach across departments and a concerted focus on the activities of regulators. The Government will formalise performance reviews, which will be conducted by all sponsoring government departments.

This action contains two further subsections:

  1. AI: The Government will work proactively with regulators to identity their future AI capability needs and provide clear strategic direction on promoting safe AI innovation. The Government’s response to the AI Opportunities Action Plan will include action to ensure the regulatory regime is “fit for the age of AI”.
  2. Innovation: The initial priorities for the Regulatory Innovation Office (RIO) have been:
    • AI and Digital in Healthcare: Working with DHSC, industry, clinicians and health regulators to develop a roadmap to harness the benefits of AI for the NHS.
    • Supporting the UK Space Industry to Grow: Working with DSIT, DBT, CAA and Ofcom to clarify digital pathways on GOV.UK to assist space operators in efficiently navigating space regulations, and supporting work with DfT and CAA to develop metrics to measure the performance of current practices designed to improve the licensing processes for space activity.
    • Drones and Autonomous Technology: As confirmed by Peter Kyle at techUK’s Policy Conference, the Apian health bridge trial has been extended between Guy’s Hospital and St Thomas’s. Similarly, the CAA will enable at least two further and larger scale trial operations by the end of 2025, and will launch an initial implementation of the UK’s Drone Market Surveillance Authority.
    • Engineering Biology: Round 2 of the Engineering Biology Sandbox Fund will open in April, and, following on from the regulatory sandbox for cell-cultivated products, the Government has been working with the Food Standards Agency and Food Standards Scotland to build capability and capacity to support development of innovative products.
    • The Quantum Sector: DSIT is establishing a new forum for regulators to prepare for the quantum revolution. Work on this includes scoping measures to upskill regulators and to ensure they work productively with industry.

The report concludes with 60 pledges developed in conjunction with the regulators. These have been designed with two priorities in mind; firstly, to have a “tangible effect on driving growth and investment”, and, secondly, to be implementable within the next 12 months.

In the tech sector, key pledges include to:

Environment Agency

Invest in the development of modernised, digital system and enhanced digital services, with an aim to accelerating responses to planning applications.

Environment Agency

Begin searching for an AI partner to collaborate with on streamlining digital services.

 CAA

Deliver a new digital licensing service for air traffic controller licensing and conclude the first stage a new digital professional pilot licensing service.

Ofcom

Finalise the second half of its ten-year framework to secure competitive investment in fibre. This includes a commitment to publishing its consultation on the Telecoms Access Review by the end of March 2025.

Ofcom

Make spectrum more available, by firstly, opening up shared access in mmWave for private networks, secondly, auctioning mmWave spectrum for mobile use, and, lastly, facilitating greater use of existing spectrum by enabling greater sharing by Autumn 2025.

Ofcom

In March 2025, Ofcom will consult on satellite direct to mobile devices.

Ofcom

Deliver the first phase of the improved web-checker by Summer 2025.

Ofcom

Complete the next phase of work on its dedicated Digital Support Service by Summer 2025.

ICO

Pilot an extension of its regulatory sandbox to allow organisations to test data-driven innovations whilst exempt from certain regulatory requirements. 

ICO

Relax enforcement of consent rules for privacy-preserving online advertising, ahead of exemptions to these legal requirements being introduced by the Government. The ICO will invite organisations to test new advertising business models within the extended regulatory sandbox.

ICO

Create a new statutory Code of Practice on AI and automated decision-making.

ICO

Scale up its data essentials training and assurance for SMEs to reduce industry compliance costs.

ICO

Develop new guidance on international data transfers, and update its transfer risk assessment tools to support the reforms set out in the Data (Use and Access) Bill.

 

For more information or to get in contact with the team, please email Samiah ([email protected]) or Dani ([email protected]).

Daniella Bennett Remington

Daniella Bennett Remington

Policy Manager - Digital Regulation, techUK

Samiah Anderson

Samiah Anderson

Head of Digital Regulation, techUK

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Antony Walker

Antony Walker

Deputy CEO, techUK

Alice Campbell

Alice Campbell

Head of Public Affairs, techUK

Edward Emerson

Edward Emerson

Head of Digital Economy, techUK

Samiah Anderson

Samiah Anderson

Head of Digital Regulation, techUK

Audre Verseckaite

Audre Verseckaite

Senior Policy Manager, Data & AI, techUK

Mia Haffety

Mia Haffety

Policy Manager - Digital Economy, techUK

Archie Breare

Archie Breare

Policy Manager - Skills & Digital Economy, techUK

Daniella Bennett Remington

Daniella Bennett Remington

Policy Manager - Digital Regulation, techUK

Oliver Alderson

Oliver Alderson

Junior Policy Manager, techUK

Tess Newton

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