Policies and Institutional Frameworks for Administrative Simplification in Denmark

1. Policies and Institutional Frameworks for Administrative Simplification in Denmark Regional Seminar on ‘Strategies, Tools, and Capacities for Administrative Simplification, Cairo, June 20-21, 2007 Jørgen Wissing Jensen, jwj@eogs.dk The Division for Better Business Regulation, Danish Commerce and Companies Agency Ministry of Economic and Business Affairs, Denmark www.betterregulation.dk

2. Reducing administrative burdens in Denmark - introduction • Organisation of the admin burden work and history • The Danish Government Action Plan for Simplification • SCM ex-ante measurements – preventing admin burdens in new regulation • Relevant websites

3. Organisation of the administrative simplification work Clear political goal: A 25 pct. reduction of the administrative burdens by 2010 SCM measurements ex-ante and ex-post and international work regarding the SCM - DCCA Coordinating the Ministries’ Simplification Action Plans - DCCA and the Ministry of Finance Better Regulation in EU - DCCA (and the Ministry of Finance) Ministries with business regulation: 15 Danish Ministries Business organisations (reference groups) Business organisations (mixed committees)

4. History of AdministrativeSimplification in Denmark • In the late 1990s Denmark gave high-priority to the work with reducing administrative burdens for businesses and established the Division for Better Business Regulation. • In November 2001 the newly elected Danish Government decided that reducing administrative burdens for businesses should be a central feature of the Governments “growth strategy”. The Government decided that in 2010 the administrative burdens should be reduced by up to 25 pct. • In 2003 an evaluation of progress towards the 25 pct. target were carried out. The evaluation showed thatonly marginal reductions had been achieved (< 2 pct). There were no clear picture of what parts of the regulation caused administrative burden and which regulations the businesses found difficult to comply with. • Late 2003 Denmark decided to adopt the Dutch developed Standard Cost Model – an action-oriented method that gives detailed knowledge of the administrative burdens. • August 2004-: The SCM full-scale baseline measurement was initiated • August 2005-: The SCM is systematically applied as part of impact assessment in order to minimize administrative burdens in new legislative proposals. • In March 2006: Denmark completed the baseline measurement of all business regulation in Denmark. • June 2006-: Each Ministry deliver their first Simplification Action Plan based on the SCM results. The plans are completed after consultation with commercial organization and companies.

5. The Danish Government Action Plan for Simplification

6. Management structures and set-up for the project: Simplification and Reduction of Admin Burdens • Coordination and follow-up on the action plans • Co-hosted by the Ministry of Finance and the Ministry of Economic and Business Affairs • Ministries report twice a year on progress • status and end reporting on simplification projects and their implementation • new analysis of burdensome regulation • Project assists ministries in identifying areas of simplification, in applying tools, the political processing etc.

7. Tools to simplify regulation

8. Monitoring Action Plans for simplification

9. Challenges related to the Action Plan • Administrative reductions must not interfere with/undermine other ministerial concerns such as environmental or consumer protection • New simplification initiatives will have to be identified continuously as new regulation is adopted – also initiatives concerning EU-regulation • Simplification initiatives should not only be identified but also implemented • Wide support to the simplification efforts will have to be ensured until 2010 – cultural barriers in the ministries

10. Realised reductions and target in 2010

11. SCM ex-ante measurements – preventing administrative burdens in new regulation

12. What we do to prevent new administrative burdens for businesses • Screening of the legislative programme for each Ministry every year • Give advice to Ministries on how to reduce administrative burdens in the consultation process • Carry out SCM ex-ante measurements on proposals with significant administrative burdens for businesses and give recommendations on how to reduce the admin burdens. These recommendations are discussed by the Governments Committee on Economic Affairs

13. Consultation procedure • Ministries are obliged to send all business relevant proposals to the DBBR • 4-500 proposals every year (+ EU proposals) • around 20 to 30 percent have administrative consequences, • only a few percent have substantial administrative consequences (in DK defined as more than 10.000 hours of administrative work per year – corresponding to around € 400.000) • Proposals with new substantial admin burdens are being ex-ante measured. Around 8-10 cases every year.

14. SCM ex-ante measurements Which proposals: Proposals with substantial administrative consequences How: Broadly carried out as a “normal” SCM measurement (three phases) – the main difference is that the results are expected and not real administrative burdens. Who: The actual measurement is carried out by a consultancy firm (the interviews etc.) in close cooperation with the Ministry and DCCA. Timetable: The measurement has to be completed within 20-25 working days. Committee on Economic Affairs: The results and recommendations from the measurement and analysis of proposals with substantial new administrative burdens are send to the Governments Committee on Economic Affairs. Decision: The Committee on Economic Affairs has to decide whether the Ministry should reduce the administrative burdens in the proposal before the proposal can be approved. Ex-post measurement: The ex-ante measurement will always be ex-post measured in order to ensure that the expected administrative burdens do not differ from the actual administrative burdens

15. Has ex-ante SCM measurements been successful? • Generally - Yes! But in some cases it has not been possible to reduce the admin burdens in the proposals either because of EU requirements or strong interests (in business organisations etc.) • We started to do ex-ante measurements in August 2005 and has carried out 15-20 ex-ante measurements. Around 30 percent of the ex-ante measurements has led to a reduction in the admin burdens • Furthermore the involvement of the Governments Committee on Economic Affairs has a preventive effect

16. Examples of outcome of ex-ante measurements

17. Relevant websites www.amvab.dk: Information about the Danish SCM measurements, ”Burden barometer”, baseline and updating reports, SCM Manual etc. www.betterregulation.dk: Information about issues of better regulation as well as relevant documents and links. www.administrative-burdens.com: Information about the International SCM Network, information about SCM measurements and simplification initiatives in member countries etc. www.regelforenkling.dk: Information concerning the Danish Action Plan for simplification and tools to simplify regulation. www.lovprocesguide.dk: Danish electronic guide to the lawmaking process.