Implementing regulatory policy: a study of frontline inspectors and SMEs

Research on the impact of regulation on Small and Medium-sized Enterprises (SMEs) has centred on SMEs' perceptions, engagement with, and adaptations to regulation. Yet, the perspective of regulators, particularly within the UK's regulatory system, has often been overlooked. These actors—regulatory organisations and inspectors—are pivotal in enacting policies that shape regulatory experience. In the UK, the regulatory system is significantly influenced by the 'better regulation' agenda, a policy initiative aimed at reducing the regulatory burden on businesses to foster economic growth. This initiative also seeks to transform regulators' interactions with businesses into a more collaborative and supportive engagement. This thesis aims to bridge the identified research gap by examining regulation from the regulators' viewpoint. Through a qualitative exploration involving in-field observations and interviews with those directly involved in implementing this agenda, the study seeks to understand how the institutional environment influences TS organisations and inspectors' approaches to SMEs within the context of the 'better regulation' agenda.

Findings reveal a transformation in the roles of TS organisations and inspectors towards being advocates and facilitators for SMEs. However, the findings also suggest a complex form of resistance to these mandates. Inspectors integrate the promoted supportive stance with traditional enforcement activities, aiming to protect consumers and advocate for SMEs against larger businesses better equipped to meet compliance standards. This integration highlights a critical observation: the shift to supportive roles is neither as straightforward nor as complete as policymakers might anticipate. Moreover, the study underscores the influence of local authorities in directing TS organisations towards supporting SMEs and fostering local economic development. This dynamic illustrates the symbiotic relationship between local governance structures and the effectiveness of regulatory practices targeting SMEs.

The study concludes that marketisation efforts within regulatory services, such as those implemented by TS organisations, offer mixed outcomes. While these strategies can enhance operational efficiency and generate essential incomes, they simultaneously pose dilemmas for inspectors. Notably, there is a perceived risk amongst inspectors that these efforts could shift the focus away from traditional regulatory public service mandates in favour of income-generation-oriented activities, which could potentially exacerbate disparities between big businesses and SMEs.