Regulatory services submission: Comprehensive Spending Review 2020

LGA, Chartered Institute of Environmental Health and Chartered Trading Standards Institute logos
A joint submission by the Local Government Association, the Chartered Institute of Environmental Health and the Chartered Trading Standards Institute.

Overview

The local response to the COVID-19 pandemic has highlighted the vital importance of critical regulatory services, such as environmental health (EH) and trading standards (TS).

Regulatory services such as EH and TS secure important outcomes for UK consumers, businesses and the economy as whole, yet have tended to operate with a relatively low public and political profile and are often not regarded as a priority by central government. However, the value, skills and agility of these services, and the people working within them, has been clearly demonstrated by the recent work in delivering and supporting the country’s response to the COVID-19 pandemic. Areas of work include business closures and enforcement, COVID-19 compliance and health and safety, contact tracing, and many other aspects of the response to which individual officers have contributed. However, as the Local Government Association (LGA), Chartered Institute of Environmental Health (CIEH) and Chartered Trading Standards Institute (CTSI) have been repeatedly warning for years – in many places, councils’ regulatory services are at tipping point.

Significant budget cuts as a result of reductions in local government funding, alongside the need to protect services such as adult social care and children’s services, have led to regulatory services shrinking and a reduction in officer capacity. At the same time the number of statutory responsibilities being placed on these services has increased, adding to the pressure on already stretched services. Even before the pandemic, this was simply unsustainable.

The unprecedented circumstances and impact of COVID-19 has brought into sharp focus the importance of ensuring resilience in trading standards and environmental health services which strive to keep our communities safe and provide valuable support to businesses. Without action to address the continued underfunding of these services, it is inevitable that these services will be unable to continue providing the same protection or prevention at local, and national levels. This means that in years to come, the UK will not have regulatory systems able to effectively protect our health, wealth, confidence and wellbeing, with knock on effects for other services (such as the NHS, social care and welfare system) which pick up the fallout when people and businesses are not protected. This is a false economy, and does not meet the Government’s 2019 manifesto commitment to provide greater redress and better regulation. The manifesto recognised that ‘good regulation is essential to successful businesses’ and so Government needs to act now to make sure these services are protected.

The Spending Review is the right time to begin to address the challenges faced by council trading standards and environmental health teams. First and foremost, it is an opportunity to address the funding shortfall and provide the resources needed to maintain these vital public protection services over the spending review period. Whilst the intention of this submission is to highlight the challenges faced by councils’ trading standards and environmental health teams, other services within local government are facing similar challenges, and the future of these services is inextricably bound with the overall funding settlement.

The LGA’s Spending Review Submission calls for a multi-year ‘core’ local government funding settlement which provides sufficient certainty and resources to help councils recover from the impact of COVID-19 and beyond. The IFS has estimated that by 2023/24, councils face cost pressures of nearly £9 billion by 2023/24 in comparison to the 2019/20 starting point, with a potential funding gap of £5.3 billion even if council tax increases by 2 per cent each year and grants increase in line with inflation.

In this submission the LGA, CIEH and CTSI are calling on Government to also use the Spending Review to look at the new approaches that are needed to ensure services are placed on a sustainable footing within and beyond the current review period. New models of funding that help facilitate a future pipeline of officers entering the professional workforce are vital to building resilience and safeguarding these critical services for the future, not least facilitating the recovery from COVID-19 and supporting businesses as we move through EU transition.

Value of regulatory services

Tackling the pandemic: regulatory services’ role during COVID-19

The COVID-19 pandemic has highlighted the vital and wide-ranging role that environmental health practitioners (EHPs) and trading standards officers (TSOs) can play in keeping our communities safe and supporting businesses. Councils’ regulatory services have had to work quickly to respond to new challenges in unprecedented circumstances. This includes:

  • supporting businesses to comply with new legislation around business closures and more recently providing advice on how they can re-open safely
  • carrying out visits and checking businesses understand and are complying with COVID-secure guidelines
  • investigating complaints from the public for example around breaches of business closure regulations
  • where required taking enforcement action against individuals or businesses
  • EHPs drawing on skills around the control of infectious disease outbreaks to implement track and trace, supported by local colleagues including TSOs
  • EHPs and TSOs working beyond their usual remit with other council services to ensure that vulnerable people received essential supplies during lockdown, helping to get people safely back into their homes when discharged from hospital and setting up temporary morgues.

Examples of roles during COVID-19

  • By June, councils − predominantly EH and TS officers − had contacted 100,000 business and advised 50,000 about the business closure regulations.
  • EHPs on the Isle of Man helped the island devise its own rules during the pandemic, which meant that it had its own track and trace programme ahead of other UK areas.
  • The environmental health team in Ceredigion County Council set up their own local contact tracing system and the area had the lowest rates of deaths from COVID-19 in Wales.
  • Trading standards’ teams at Heathrow Airport have stopped 6.5 million sub-standard face masks and 8,000 counterfeit hand sanitisers coming through the airport. Ealing Council has seized more than half a million substandard face masks – which fell apart during inspection - and 2,600 bottles of illegal hand sanitiser. The masks had fake safety markings, did not correspond to the description on the packaging and had no importer details. The council is undertaking criminal investigations.

This work demonstrates the agility and flexibility of these services to respond to emerging challenges. These skills will be as equally important in helping to manage local lockdowns and moves towards recovery.

Wider contribution of regulatory services to national priorities

Prior to COVID-19, the tools and skills that these services offer were already being deployed to seek to address a range of national priorities as well as local challenges, including tackling knife crime, improving building safety and housing standards, the export and import of food as well as supporting businesses.

In 2018, the Chartered Trading Standards Institute (CTSI) and LGA published a report which highlighted the value of trading standards and the broad and diverse range of activities that local trading standards services are able to support. The examples below help to show some of the key areas where these services are making a difference.

Serious violent crime: under-age knife sales :Council trading standards services in London are playing an important role in tackling knife crime by enforcing the law banning the sale of knives to under 18s. Trading standards teams conducted around 1000 knife test purchases in stores last year with young volunteers and will continue to prosecute offending businesses.

Croydon Council in particular has led the way by conducting the first ever national enforcement campaign tackling online sale of knives to under 18s which identified a high level of non-compliance amongst online retailers. Croydon Council has now successfully prosecuted 15 businesses across the country under its trading standards team’s pilot clampdown against illegal online knife sales to children. The scheme is backed by the Home Office and National Trading Standards.

The latest cases – against shopping website Very’s operating company Shop Direct Home Shopping Limited and Lancashire-based tool specialist Today Tech LLP – came after a 13-year-old test purchaser in Croydon, was able to buy knives online from both companies.

Housing and public health: Poor quality housing costs the NHS around £1.4 billion and wider society around £18 billion every year. As an example of the impact housing teams can have in reducing and preventing these costs, analysis undertaken by Islington council showed that a single residential EHO post helped save the NHS £88,377 and society £220,944 between 2011 and 2015.

These figures quantify savings made to the NHS and society through EHOs’ work to carry out housing health and safety rating (HHSR) assessments which identify hazards that harm health in the home. The figure captures savings made from the mitigation of hazards identified, and an evaluation of the savings made, from thermal insulation programmes and grant aided adaptations, as well as the money saved by bidding for money from the Clinical Commissioning Group to pay for an additional salaried EHO post.

Furthermore, The Association of Chief Trading Standards Officers (ACTSO) Value of Trading Standards Report presents strong evidence of the value which the trading standards profession contributes to consumers, businesses and to the economy. The report highlights that at least £42.6 million of consumer detriment was prevented by trading standards activity in 2018/2019. As experts in consumer protection law and regulation in an increasingly complex marketplace, including the rapid growth of the digital economy and global context, trading standards play a key role in supporting businesses. This includes providing guidance and training to businesses seeking to comply; and taking appropriate and proportionate steps to secure compliance and address criminality when required. According to ACTSO, in 2018/2019 trading standards responded to over 13,615 requests for advice from businesses.

Both trading standards and environmental health teams lead work on the Government’s Primary Authority scheme, which provides assured advice to businesses in a range of technical areas at full cost recovery prices. Primary Authority is a tool that has helped support a range of different sized businesses and trade associations in various different sectors. However, the LGA has previously argued that councils should be able to set charges above this level given the significant discount that full cost recovery charging represents on normal market rates in equivalent consultancy markets.

Routine activity: day-to-day protection work

The routine work of these services is rarely in the spotlight but makes an important contribution to a range of local and national priorities.

Trading standards enforces over 250 statutory duties with officers bringing their skills and expertise to bear on a wide range of issues impacting consumers and businesses. The day-to-day work of trading standards includes everything from fair trading and e-commerce enforcement through to legal metrology, product safety and intellectual property regulation. That is alongside food chain and rural enforcement roles in areas such as feed and food, animal health and welfare and agriculture.

Environmental health services work across an equally diverse array of issues underpinning the public health agenda, from enforcing housing standards, tackling noise and statutory nuisances and air pollution and issuing environmental permits, supporting consumers, workers and businesses through food and health and safety work, and addressing public health issues through supporting infectious disease controls.

Before the pandemic, councils’ work was carefully planned and prioritised according to statutory requirements, intelligence, risk and need, but there were already challenges around competing demands across core business as usual activity. The pandemic has exacerbated existing capacity challenges within regulatory services with much of this business as usual work needing to be reprioritised and in some cases suspended (such as food inspections) so officers can focus on issues such as COVID-19 related health and safety visits and, increasingly, contact tracing activity. This has resulted in a large backlog of inspections which is expected to remain as officers continue to be deployed on COVID-19 activity.

Exiting the European Union

In addition to the COVID-19 pandemic, the end of the transition period in a few months will place further demands on council regulatory services, and on port health authorities (PHAs) in particular.

Councils’ regulatory work through business as usual activity plays a key role in protecting UK market standards and providing assurance that standards are being maintained. As a third country, the EU may place a greater emphasis on the visibility of this assurance, requiring councils to scale up monitoring and compliance activity that has not previously been a priority. Being a third country will also lead to the introduction of checks on product of animal origin and fisheries goods moving between the UK and EU, increasing demands on port health authorities and environmental health officers issuing export health certificates.

Examples of additional work

Additional funding will be required for PHAs to ensure there are sufficient resources to implement additional checks on EU goods. This will require additional suitably qualified environmental health officers and appropriate training for existing qualified staff to ensure competency. Some PHA’s estimate the changes will require in excess of 120 per cent of current staff in the worst-case scenario.

More generally, as we leave the EU single market, frontline trading standards and environmental health officers will play a key role in making sure new regulations and legal frameworks operate effectively. This includes offering advice to responsible businesses and supporting them to successfully navigate changes to regulations and trade deals. It will also include addressing the issues that inevitably arise in a changing enforcement environment, ranging from uncertainty and ignorance of new rules to rogue traders seeking to exploit changes in legal frameworks.

Key risks to regulatory services

Lack of capacity

Over the past 10 years, reductions in local government funding have had a significant and detrimental impact on regulatory budgets and staffing. Survey data highlights the extent of the cuts.

Environmental health: Numbers of council Environmental Health Officers in England and Wales fell by a third (33 per cent) from 2009/10 to 2016/17. Looking at specific areas of environmental health, from 2009/10 to 2016/17, the total number of council food law enforcement staff in the UK fell by 27 per cent and the number of council staff working on food standards in the UK fell by half. In the same period, spending by councils in England on food safety fell by 37 per cent. The number of council health and safety inspectors fell by 48 per cent and spend on health and safety by English councils fell by 41 per cent, in the period from 2009/10 to 2016/17.
Trading standards: According to the CTSI 2018/2019 Workforce Survey, there was a loss of 99.4 full time qualified (meaning individuals holding a professional trading standards qualification such as DCATS, DTS, CTSP or equivalent) trading standards posts (across the 78 services that responded to the 2017 and 2018 surveys). This is the equivalent of 10 trading standards services of cuts, and comes on top of the 50 posts lost according to the 2017 CTSI Workforce Survey.

The average number of qualified trading standards officers per authority is 9.4 full time equivalent (FTE), but 53 of those responding to the 2018/19 survey had a total of less than six qualified officers. Many trading standards services have less than 5 full time equivalent staff and only one fully qualified trading standards officer. In the 2018/2019 survey, only 44 per cent of those heads of service who responded felt that they have the expertise to cover the statutory duties placed upon their services. This is a large change from 2017, when 70 per cent said they could cover these duties, while 30 per cent said they could not.

In interviews, the report comments that a smaller service summed this situation up as being, "...on a knife edge...", and, "having the team members now to fulfil the role, but going forward they are ageing as a team with little confidence in being able to recruit new staff".

Due to the complexity of the work of trading standards, and the varying priorities between services, CTSI has avoided stating a minimum number of staff that are required to protect consumers. However, the Audit Scotland report Made to Measurewhich cited that small services with fewer than eight fully trained staff are increasingly unable to provide adequate protection, may be a useful indication.

Staff in these services have huge pride in the work that they do and work tirelessly to deliver for local residents and businesses, but the impact of the cuts has been stark. Even before the impact of COVID-19 and the new demands the pandemic has created, services were struggling to effectively resource the many statutory duties they are responsible for. Although some of these duties – the activities councils are legally required to undertake – may by their nature be reactive, or occur only rarely, thereby requiring little ongoing resources, the range of duties the services have and extent of the cuts mean that councils are now having to prioritise even core areas of activity.

Impact of reduction in capacity: Councils have been unable to carry out all the hygiene and standards interventions that food businesses were "due" according to the Food Law Code of Practice. Almost eighty six per cent of due food hygiene interventions were achieved in 2018/19 in England, while 36.8 per cent of due food standards interventions were achieved in the same period.

Between 2009/10 and 2016/17, proactive health and safety inspections by councils fell by 94 per cent and total health and safety visits fell by 71 per cent in England, Scotland and Wales.

With services not resourced to deliver the same wide range of activity as before, there is a need for trade-offs and prioritisation between competing local and national priorities. While services typically aim to be intelligence led, requirements set at the national level in traditional areas of work (for example, the food law code of practice) can create challenges in most effectively targeting work. Staff report the need to ‘raise the threshold’ on the cases they can take, by either being more willing to drop a case if the investigation indicated that there would be no prospect of successful legal action − or only taking cases where there were significant levels of detriment. A recent report by Unchecked provides an example of the impact this has had on the enforcement of consumer safety regulations.

There are concerns that the reduction in proactive and routine regulatory work as a result of reduced capacity will have a long-term impact on compliance, leading to poorer outcomes and more enforcement issues, as well as undermining the services’ ability to effectively support the big agendas.

Increasing duties and demands

The demand on limited resources has been exacerbated by the ever-increasing enforcement burden that is being placed on councils’ regulatory services and trading standards, despite the fact most councils are already struggling to fulfil their existing statutory duties.

Number of statutory duties: In 2013, as part of the CTSI's National Trading Standards Conversation, 36 Bedford Row Chambers were commissioned to produce a definitive list of statutory duties for trading standards. This schedule identifies over 250 statutory duties imposed on weights and measures authorities, local authorities, food authorities and feed authorities and other legislation likely to be enforced by trading standards departments. Whilst this list has not been updated, we understand that enforcement responsibilities for both trading standards and environmental health have increased year on year.

In the last two years, councils have seen new enforcement responsibilities created or proposed on diverse issues including: the ban on microbeads in cosmetics; the sale of materials for wood burning stoves; the ban on plastic straws, drink stirrers and cotton buds; the ban on tenant fees; the requirement for electrical safety certificates for privately rented homes; a ban on energy drinks; the introduction of calorie labelling in restaurant chains; and the sale of knives and acids.

Councils support the important objectives underpinning the new regulations that are being introduced. However, rather than individual departments developing new policies and burdens assessments in isolation, there is a need for a cross-government view about the overall demands on these services, recognition of the extent to which local services are already having to prioritise and target their activities towards the most critical issues, and therefore realism about what can be delivered given the resources available to local regulatory services. Unless the impact assessments attached to new duties enable councils to employ more staff, the funding identified by them will be of no use in practically supporting councils to fulfil these new responsibilities in addition to their existing ones, with the result that either these important policies will simply not be delivered, or another important activity will have to be stopped to accommodate the new work.

Training and recruitment

Whilst funding to carry out additional work can help with some measures to quickly bolster capacity (for example, through backfilling posts and agency staff), recent work on both COVID-19 and EU transition has highlighted that there is limited scope to quickly and significantly boost the regulatory workforce. Existing staff levels and demographics within the services, combined with the future pipeline of officers, create serious concerns about the future resilience of the services.

There is an urgent need for investment in recruitment and training to ensure that TS and EH services, and other smaller council services, are sustainable in the long term. The ageing workforce within the services creates the prospect of potential skills shortages in the future, but the number of trainees entering the professions is arguably insufficient to mitigate this risk. Obtaining professional qualifications takes time and resources, so steps must be taken now to address this issue going forward.

CTSI’s latest workforce survey highlights that low numbers of planned trainee posts and falling training budgets mean that maintaining skills and preparing for the future was seen as a challenge for many services. Equally there is not a large cohort of EH students or trainees that could be quickly brought into the workforce.

Training and qualification : There are around 65 graduates coming off CIEH accredited courses every year. One hundred and forty five environmental health practitioners (EHPs) became fully qualified last year (2019) and 339 in the past three years (2017-19).

The average time that it takes for an EHP to become fully qualified is around five years (three years for the accredited course and two years to do professional practice assessments).

According the CTSI Workforce Survey 2018-2019, more than a third of trading standards officers have over 20 year’s post-qualification experience, with 12 per cent of the workforce having less than five years’ experience. This confirms that an ageing trading standards workforce is a threat to future professional capacity, a concern expressed by many of the heads of service interviewed.

Whilst there remains a great deal of experience within the trading standards profession, at the time of the survey there were only 50 trainee trading standards officers currently in post, and 21 planned for 2019/20. This may reflect the lack of funding for training, with the average training budget per service being less than 2 per cent. Seventy per cent of heads of service were, however, interested in appointing an apprentice.

Building a sustainable future for regulatory services

The COVID-19 pandemic has highlighted the need for resilience in our key public protection services. It is now clear, and widely accepted, that there is a pressing need to develop a strategy to ensure the future sustainability of regulatory services, and the Government must use the Spending Review as an opportunity to begin this.

As part of this, in the short term the Government should look at the immediate steps it can take to reduce the current burdens on regulatory services and free up capacity to support current priorities. It should also undertake work to identify more creative enforcement approaches than simply allocating new responsibilities to councils.

Fundamentally, however, addressing capacity challenges in these services requires a sustainable funding model for local regulatory services that facilitates the training and development of new practitioners, so that services can continue their vital roles in protecting consumers and supporting businesses into the future, as the current workforce retires or leaves local government.

We therefore have three key asks for the Spending Review and beyond.

  1. Alternative approaches to enforcement

In light of current workforce pressures and conflicting demands on services, the Government should issue a clear statement endorsing the risk-based approach being adopted by councils and provide a commitment to work with national regulators and councils to identify priorities for environmental health and trading standards services during the current pandemic and subsequent recovery. Low risk activities should be suspended, and the Food Standards Agency should seek approval from the Minister for an exemption from the Food Law Code of Practice. This will allow councils greater flexibility in how they manage and prioritise activities and free up resources to focus on COVID-19 and EU transition.

More broadly, in relation to new areas of work and responsibility, the Government should consider alternative approaches or routes to enforcement rather than simply allocating new responsibilities to councils, for example developing centres of expertise and facilitating the coordination of regulatory work at a regional or national level.

There are existing models that could be utilised, for example the lead authority model which is currently used to regulate estate agency work across the UK and letting agency work in England. Funded by Ministry of Housing, Communities & Local Government (MHCLG), letting agency regulation (covering England) is led by Bristol City Council and estate agency enforcement (across the UK) is operated from Powys County Council. The team work closely with councils, which have local enforcement responsibilities and are responsible for overseeing the operation of relevant legislation, taking enforcement action, approving and overseeing the UK’s consumer redress schemes as well as issuing advice and guidance on public, businesses and enforcement authorities.

A commissioning model has also proven effective for those elements of trading standards’ work that are best delivered regionally and nationally with projects commissioned by National Trading Standards through this model. We would welcome the opportunity to work with relevant departments to consider the extent to which this approach could be further utilised.

  1. A cross government approach and a co-ordinated new burdens process

Until the high profile work on EU exit and COVID-19, one of the difficulties in increasing awareness of the growing pressures in regulatory services was the fact that their statutory responsibilities are split across a wide range of Government departments, including the Department of Health and Social Care, Department for Environment, Food and Rural Affairs, Department for Business, Innovation and Skills and the Home Office, as well as MHCLG. Going forward, there is a need for a cross-Government view and coordination on balancing competing priorities and maintaining resilience in these services.

An example of how this has impacted these services is where the new burdens process has failed to consider the cumulative impact of additional enforcement responsibilities that are being added to services from different government departments.

Some new burdens assessments identify additional funding for councils linked to the officer time that is expected be required to support the implementation and enforcement of new legislation, although levels of new burdens funding are generally so minimal as to be extremely unlikely to support services in any meaningful way. Moreover, the process ignores the wider context of the number of new enforcement duties being handed down to services where capacity has already been reduced significantly because of budget cuts.

Government needs to work collaboratively across departments and with councils to identify what support is needed to effectively implement new policies in the context of existing priorities. Otherwise the risk is that new laws will simply remain unenforced due to the resource constraints and need for prioritisation outlined above.

  1. Funding

Fundamental to increasing resilience in regulatory services is the development of sustainable funding streams that enable councils to increase capacity and invest in training and development of the future workforce, ensuring a pipeline of qualified staff able to protect communities from current challenges and those that arise in the future.

Sustainable funding for regulatory services must be viewed in the context of sustainable funding for councils overall. The LGA’s submission to the spending review sets out our proposals for addressing the nearly £9bn cost pressures and £5.3bn funding gap the IFS has estimated councils will face by 2023/24. Without delivering on this overall need for councils, smaller services will understandably continue to be squeezed by services such as social care and children’s services.

We recognise that in a challenging fiscal environment, it will be difficult to increase funding for regulatory and other services to the extent that is needed. However, within regulatory services there is scope to develop other funding streams to avoid the full burden on taxpayers, with regulated businesses a potential source of income. It is already an established principle in other areas of UK regulation that businesses should pay to operate within specific regulatory frameworks (such as alcohol or taxi licensing) and that the polluter pays principle should apply where businesses reach a threshold of non-compliance requiring that enforcement action is taken (as seen in the fines levied by national regulators such as the Gambling Commission or OFGEM). The Health and Safety Executive, a co-regulator with councils under the Health and Safety at Work Act, already operates a fee for intervention regime that levies charges on business in material breach of health and safety regulations for the initial inspection and investigation required to identify the breach, and any inspection and advice required in order to remedy the breach.

To help build the resilience of local regulatory services, this model could be extended to local authority enforcement. Government should therefore expedite work to explore charging models and consider how a new funding model could ensure cost recovery for councils in line with the recommendations of the Cabinet Office’s Regulatory Futures Review and Regulating our Future.