Part 2: Regulators Business Impact Target Section 14 and Schedule 2: Business Impact Target
This section and accompanying Schedule enable the Government to bring certain provisions made by statutory regulators into scope of the Government’s Business Impact Target.
	The Business Impact Target (BIT) in Sections 21-27 of the Small Business, Enterprise and Employment Act 2015 (SBEE Act) requires the Secretary of State to:
Publish a target for the Government regarding the economic impact on business activities of new or amended regulatory measures (or provisions) that fall within the definition of "qualifying regulatory provisions" and that come into force or cease to have effect between two general elections;
Publish annual reports covering the impact of qualifying regulatory provisions in the reporting period in which they came into force or ceased to have effect and in aggregate over the period between two general elections;
Appoint an independent verification body that must verify the assessments of economic impact of all measures in scope of the business impact target, and the classification of the regulatory provisions as qualifying regulatory provisions.
	The BIT applies to statutory provisions. These include public Acts made in the UK Parliament, subordinate legislation made by UK Ministers, and other similar provisions that have effect by virtue of the exercise of a function conferred on a Minister of the Crown by an Act – such as statutory guidance, policy and procedures relating to the securing of enforcement and compliance with regulations. The scope of the BIT is currently limited to the activity of UK Ministers. This includes non-statutory regulators who exercise regulatory functions for or on behalf of UK Ministers.
	Subsections (1) - (3) extend the scope of the BIT by amending the definition of "statutory provision" to cover provisions made by statutory regulators which exercise their own statutory powers. The Secretary of State will specify the "relevant" statutory regulators by regulations which are subject to the affirmative resolution procedure.
	Subsections (5) and (6) deal with implementation. They clarify that when the SBEE Act is amended, the amendments as to what is within scope of the BIT will apply for the whole of the relevant period i.e. the period between the last general election and the next one, including the part of that period that has already elapsed. The first set of regulations made specifying statutory regulators will have the effect that those regulators will be within the scope of the BIT for the whole of the relevant period.
	Subsection (7) sets out transitional arrangements for regulator reporting in respect of any past reporting period, which will apply on the making of the first set of regulations that will bring statutory regulators in scope of the target. Subsection (8) allows for subsequent regulations listing statutory regulators to contain similar provisions as to the period for which those regulators will be within the BIT and how they will report in respect of any past reporting period.
	Schedule 2 sets out the amendments which arise as a consequence of bringing the activities of statutory regulators within the scope of the BIT provided in subsections (1) to (3) and makes some related amendments to the SBEE Act.
	Paragraph 2 of Schedule 2 amends the existing BIT reporting duties of the Secretary of State under the SBEE Act. Specifically, it amends the required content of the annual reports in relation to regulatory provisions which are measures which are not in scope of the target. They allow for the report to contain a summary (rather than a list) of regulatory provisions which are not primary or secondary legislation and which are not in scope of the target. This provision is intended to streamline the reporting requirements in light of the extension of the target.
	Paragraph 3 of Schedule 2 clarifies a further aspect of the reporting duty in section 23 of the SBEE Act. Specifically that, in assessing aggregate economic impact in annual reports, the contribution of provisions that came into force in previous reporting periods is to be assessed by reference to the assessments of the impact of those provisions that were made in the reporting period in which they came into force.
	Paragraph 4 of Schedule 2 introduces a new reporting duty for the regulators specified in regulations by the Secretary of State. The duty requires such regulators to publish certain information to enable the Secretary of State to fulfil his BIT reporting obligations under section 23 of the SBEE Act. It also ensures that regulators assess economic impact consistently, and in line with the methodology that is published by the Government of the day. Each regulator must publish the following information no later than two weeks after the end of each annual reporting period:
A list of all new or amended qualifying regulatory provisions for which the regulator is responsible which have come into force or ceased to be in force in that reporting period;
An assessment of the economic impact of these provisions on business activities, assessed in accordance with the published BIT methodology and verified by the Independent Verification Body appointed under section 25 of the SBEE Act; and
A summary of all new or amended regulatory provisions for which the regulator is responsible which do not qualify for the target and which have come into force or ceased to be in force in the reporting period.
	Regulators must have regard to guidance issued by the Secretary of State regarding the publication of this information.
	Paragraph 5 of Schedule 2 amends section 26 of the SBEE Act which addresses provisions required as a consequence of the Secretary of State making changes to the BIT or the scope or methodology. They align the variation procedure for regulators with those that already apply to the actions of UK Ministers under the SBEE Act. In particular, if the methodology or the scope of the target is varied within a Parliamentary term, regulators will be required to revise any lists, assessments or summaries that have already been published to bring them into line with the revised scope or methodology. If regulatory measures previously outside of scope of the BIT are brought within scope, the regulator will be required to make a backdated assessment of the economic impact of those measures. All revised or back-dated assessments must be verified by the Independent Verification Body and published to enable the Secretary of State to produce amended reports as required under the SBEE Act.
	The Secretary of State may issue guidance in relation to this process of updating lists and assessments, which regulators must have regard to.
	This measure extends to the United Kingdom. The measure will apply to statutory regulators but not in relation to any regulatory provision which is within the legislative competence of the Scottish Parliament, Northern Ireland Assembly or the National Assembly for Wales (see section 22(7) of the 2015 Act). The result is that, where regulators operate under a mix of reserved and devolved powers, only the regulatory activities undertaken pursuant to reserved powers would be considered in scope.