Study shows benefit of environmental regulation

A study by the Department for Environment, Food & Rural Affairs (DEFRA) has shown the benefits of UK environmental regulations are increasing. The study covers all regulations for which DEFRA is responsible.

The estimated cost-benefit ratio of regulation has risen from 1:2.9 in 2011 to 1:3. This means that the general benefits of the regulations outweigh the net cost to business and civil society by at least three to one.

DEFRA explains this is due to the introduction of new regulations and the removal of old regulations.
The regulatory reform plan for the Department was published in April 2014 and provided an overview of how actions were being taken to reduce regulatory burdens on business. This included a review of over 1200 regulations and the planned removal of 350 obsolete regulations.

The DEFRA study has also calculated the estimated direct costs of regulation to businesses to be £6 billion between 2012 and 2021. 86% of this figure is related to compliance, with the remaining 14% being administrative burden. The estimated direct benefit to business is £2bn a year, which gives a net cost of £4bn. The benefits include reduced flood damage, fewer instances of agricultural disease and more efficient use of energy.

Over £1billion in public expenditure is associated with DEFRA regulations, of which the majority is spent on flood protection. Land remediation, biodiversity protection, administration and enforcement account for most of the rest.

The regulatory reform plan is still in place and depending on the outcome of next month’s upcoming election, the changes to environmental law look set to continue.