Regulation exists in both the public and private sectors to manage risk and protect consumers. There are two main forms - traditional regulation by government agencies and self-regulation set by professional bodies and private organizations. While self-regulation is preferred by the private sector for its flexibility, there are questions around whether it can be fully trusted without oversight from government regulators. Effective regulation requires identifying risks in both foreseeable and unforeseen ways in order to manage industries where public and private interests intersect.

1. Regulation in the Public Private
Interface

2. Overview
I. Introduction
II. What is regulation?
III. Why regulate?
IV. Self-regulation
V. Regulation of risk
VI. Conclusion

3. Introduction
• Many people are under the impression that
the UK has a deregulated economy
• This perception is inaccurate
• The UK has a regulated free market economy

4. Introduction
• There are many forms of regulation in both
the public and private sectors
• Where the public and private sectors
meet, there is a clash between different forms
of regulation
– Regulation by the State
– Self-regulation

5. What is Regulation?
Traditional regulation is about the government
or government agencies enforcing rules, with
penalties for non-compliance
P. May (2007); “Regulatory Regimes and Accountability”
Regulation & Governance vol. 1, pp. 8-26

6. What is Regulation?
Regulation is about “sustained and focused attempts
to change the behavior [sic] of others in order to
address a collective problem or attain an identified
end or ends, usually through a combination of rules
or norms and some means for their implementation
and enforcement, which can be legal or non-legal.”
J. Black (2008); “Constructing and contesting legitimacy and
accountability in polycentric regulatory regimes” Regulation &
Governance vol. 2, p. 139

7. What is Regulation?
• Note that this regulation is not necessarily
carried out by the State
• Much regulation is carried out by professional
bodies and private organisations
– They regulate the behaviour of their members

8. What is Regulation?
From an economic or business
perspective, regulators can decide:
– who can enter a market
– what prices can be charged
– by how much prices can increase
– service standards
This is not necessarily carried out by the State

9. Why regulate?
According to the National Audit Office:
“The purpose of regulation is to protect the
public and the environment and provide a
level playing field for business.”
NAO (2008); “Regulatory quality: How regulators are
implementing the Hampton vision”

10. Why regulate?
• Regulation is in place to protect consumers
• This could be implemented by the State, or
through self-regulation
• Thus, it could be self-imposed upon particular
businesses or groups of organisations to set
minimum standards
– These standards could be about product
safety, standards of service delivery, membership
requirements, etc.

11. Self-regulation
• This is seen as the preferred form of
regulation by the private sector
• It is perceived to be more effective, less
burdensome, and more flexible
• It is also seen to be more responsive

12. Self-regulation
Self-regulation “involves the regulation of the
conduct of individual organizations, by
themselves. Regulatory rules are self-
specified, conduct is self-monitored and the
rules are self-enforced.”
Bartle & Vass (2007); “Self-Regulation within the
Regulatory State” Public Administration vol. 85-
4, p.888

13. Self-regulation
• Can self-regulation be trusted?
• Think about the Financial Services Authority
and the regulation of the banks
– The FSA is staffed by current and former members
of the banking sector!

14. Regulation of Risk
“The idea of risk based regulation is to target
both proactive and reactive strategies in
accordance with the risks a firm poses to the
regulators’ objectives.”
Baldwin & Black (2008); “Really Responsive
Regulation” The Modern Law Review vol. 71-1, p.66

15. Regulation of Risk
• Think of different industries in the public-private
interface
e.g. nuclear industry, education, bio-medical science
• What risks might be posed?
It is easy to think about foreseeable risks. What about
the unforeseen risks?
• How do the different bodies prepare for such
risks?

16. Conclusion
• Regulation is a significant factor in the
operations of both public and private sector
organisations
• There are many regulatory bodies, as well as
organisations that perform regulatory
functions

17. Conclusion
• Office of Communications (Ofcom)
• Office of Standards in Education (Ofsted)
• Financial Services Authority (FSA)
• National Audit Office (NAO)
• Environment Agency
• Food Standards Agency
• Human Fertilization and Embryology Authority
• Office of Gas and Electricity Markets (Ofgem)
• Office of Rail Regulation

18. Conclusion
• A final thought about regulation...
• Quis custodiet ipos custodies?
• Who regulates the regulatory bodies, or the
organisations that co-ordinate self-regulation?