Regulatory Design And Review - Lessons From Grenfell Tower

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Hamilton Stone director Ian Holland has just read an excellent review by Tayler Lonsdale of the issues leading to the catastrophic fatal fire in Grenfell Tower in London. It is a well-written and accessible discussion that avoids the understandable vilification of those who have cut regulatory oversight and 'red tape', while still bluntly identifying important process failures. 

Lonsdale describes four key message for regulatory design:

  • Complexity kills. Safety regulations should be as simple and straightforward as possible to ensure compliance and protect lives.
  • Timely regulatory review is critical. The timely review of existing regulations should never be sacrificed to meet arbitrary regulatory reduction goals.
  • Regulators should take public comments seriously. Incorporating public feedback into rule making in a timely and transparent manner would improve regulatory effectiveness.
  • Regulations should be stricter for government-operated entities.

Hamilton Stone does work in social service fields where regulation is complex and where government-operated entities are important parts of the service mix. It makes Lonsdale's last point, about how to regulate government-operated entities, particularly relevant. A common solution over the last three decades has been to privatise them or transfer those functions into the non-government space.

However, we have in many areas reached the limit of this strategy (and in some service spaces have probably moved beyond what would have been wise).

Here is what Lonsdale says about regulating government entites, in the wake of the Grenfell Tower fire:

"Financial and criminal legal liability was not an adequate incentive for the local government council who owned Grenfell to mitigate safety risks. For government entities that cannot ‘go out of business’, prescriptive and strict safety regulations should be applied as an additional fail-safe measure with third-party audits rather than self-inspections.
If there is a tacit agreement between inspectors and building owners that the regulations will not be enforced due to budgetary constraints, the government should either adjust the budget to cover the gap or else make the safety versus affordability trade-off transparent to residents."

This message will be unpopular with many governments and regulatory designers. There is a challenging implication here: service providers should be subject to different tests depending on their ownership status rather than on the services they deliver. 

Eighty people died in Grenfell Tower. The resulting scrutiny of compliance regulation must be allowed to challenge what we think about regulation. We should strive to learn something from such tragic, preventable deaths.