• HM Treasury’s (HMT) regulation Action Plan intends to make regulators less risk averse, but government has not defined the risk appetite it expects regulators to work towards.
  • HMT and the Department for Business & Trade (DBT) want to reduce administrative burden on business by 25%, or £5.6 billion per year, but have not allocated departments individual targets to deliver this.
  • Regulators recognise that innovation plays an important role in driving growth and have made progress to support this.
  • The NAO has recommended that DBT and HMT develop a package of work to help Secretaries of State and Select Committees to hold regulators to account on delivering their commitments to growth.

In March 2025 HM Treasury (HMT) published its regulation ‘Action Plan’, which outlined a new strategy to encourage regulators to support innovation and economic growth, and cut down on administrative burdens by 25%, creating an annual net reduction target of £5.6 billion.1

The Action Plan comprises a series of regulator commitments, performance reviews of key regulators, and a target to reduce the administrative burden of regulation for business. However, there is a risk that businesses will not feel the benefits of reductions if these are outweighed by the total cost of new regulation.

Although the Action Plan ultimately aims to make regulators less risk averse, HMT and the Department for Business & Trade (DBT)2 have not yet provided comprehensive insight into what those risks are or what their risk appetite is.3

The Action Plan is the tenth initiative designed to reduce the cost of regulation in the last 20 years, the most recent being the 2017 Growth Duty. However, DBT and its predecessor did not monitor the implementation of the Growth Duty and has therefore not been able to hold regulators to account, or assess the impact of the duty. DBT and HMT need to establish a regular reporting cycle of progress against the Action Plan, or this could affect the future success of its delivery.

A survey by the NAO found that regulators recognise that they have a role in supporting economic growth. Nearly three-quarters of regulators surveyed reported they are taking specific actions to implement the Growth Duty.

Responses to our survey also show that nearly two-thirds of respondents believe that innovation will be the key driver of economic growth, and some are changing to support innovation in their sectors by reducing the cost of compliance, changing organisational design to support the sector, and reducing barriers to innovation in the sector.

In order to achieve the government aims for the Action Plan and regulation more widely, the NAO has recommended that HMT and DBT should consider:

  1. Developing an implementation plan and monitoring arrangements for the Action Plan by Spring 2026, including an implementation timetable and programme evaluation.
  2. Developing a package of work to help Secretaries of State and Select Committees hold regulators to account on delivering their commitments to growth.
  3. Setting out publicly which regulators are in scope of the Growth Duty.

“The Action Plan plays a key role in the government’s vision of achieving enhanced economic growth and innovation, and our report shows that it is helping to encourage regulators to consider growth when making key decisions.

“It sets a clear expectation that regulators must become less risk-averse. But regulators should implement regulation in line with their sponsor department’s strategic steer and risk appetite. In order to achieve the government’s vision, DBT and HMT should articulate how regulation can support growth and manage risk simultaneously. Only then can they help departments articulate government’s risk appetite to regulators.”

Gareth Davies, head of the NAO

Read the full report

Regulating for growth

Notes for editors

  1. DBT and HMT estimate that the 25% administrative burden reduction target equates to a net annual target of £5.6 billion by the end of the parliament. Departments will submit annual simplification plans to DBT and HMT each Spring, but without individual targets it is not clear whether departmental plans to reduce the administrative target will sum to 25%. 
  2. Regulation is often designed by individual departments and implemented by regulators. The Department for Business & Trade (DBT) leads on regulatory reform across government.   
  3. DBT and HMT have not yet articulated how regulation can enable growth in the context of balancing objectives with managing, and accepting, greater risk. Without this it is unclear how regulators and sponsor departments can align their strategy for growth and appetite for risk. 

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