Reform on the cards for UK regulators? HM Treasury’s new Action Plan

On 17 March 2025, HM Treasury published its policy paper: New approach to ensure regulators and regulation support growth. The paper – which was updated on 31 March 2025 – sets out the Government’s plan to overhaul the country’s regulatory system to encourage new investment, innovation and growth – in short, the Government wants to reduce “the impact of red-tape”. 

The paper identifies three problems with the regulatory system as it currently stands, and commits the Government to three priority actions to address them: 

1. The system is complex and duplicative – both in terms of what businesses have to do to demonstrate compliance with regulation and the landscape of regulators which implement and enforce those regulations. Action 1 (Tackle complexity and the burden of regulation) includes a commitment to remove or consolidate existing regulators where it makes sense to do so. Environmental, planning and health and safety regulation appear to be a key focus for Action 1, with proposed reviews of regulation and guidance to ensure it is fit for purpose. 
2. There are now more than 100 bodies involved in regulation, many of which have overlapping areas of focus. The Government suggests this has caused “increasing uncertainty as to regulators’ roles and remits”. Action 2 (Reduce uncertainty across our regulatory system) seeks to simplify the duties of key regulators by removing or consolidating them, particularly where a regulator is considered to have too many duties or duties that overlap. The Government is also working with regulators to explore ways to improve transparency – particularly in relation to processing decisions and authorisations.
3. The approach is “too risk averse” and has struggled to adapt to new industries and new technologies. Action 3 (Challenge and shift excessive risk aversion in the system) seeks to encourage innovation (where appropriate) in the regulatory system. The Government has highlighted the growth of AI and the need to ensure that it is not held back due to “ineffective regulation” and regulatory barriers.

In terms of scope, the Government intends the reforms to apply to all bodies exercising regulatory powers and functions relating to ‘reserved matters’. Regulators in Scotland, Wales and/or Northern Ireland may therefore also need to have regard to the objectives of the policy paper if their work is done under the policy remit of the UK government or UK parliament. 

The plan concludes with a table of pledges given by key regulators in support of the Government’s objectives – each pledge is said to be based on implementation within the next 12 months. The Financial Conduct Authority (“FCA”), the Environment Agency (“EA”), Ofgem and the Health and Safety Executive (“HSE”) are among the list.

If you would like to discuss how current or future regulations impact your business, please contact Charlotte Whitaker, Guy Bastable or Ben Davies.