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Evaluation of regulatory impact assessments 2006-07

Regulatory Impact Assessments (RIAs), used to assess the need for, and potential impact of, new regulations, have not always been used effectively, according to a report published today by the National Audit Office. The report finds that RIAs often failed to consider fully the cost and benefit of regulation, and did not take account of the long term implications of regulation particularly for issues of compliance and enforcement.

In its fourth evaluation of RIAs, the National Audit Office sampled RIAs from the Department of Health and the Department for Communities and Local Government. While the majority of RIAs in the sample were competent, with fewer cases of poor quality analysis, there were continued weaknesses in the quality of cost benefit analysis and insufficient consideration of the impact of the proposed regulatory changes.

Impact assessments are designed to provide a strong evidence base to support the process of policy making, but the NAO found RIAs have not been an integral part of the process as in many cases they are being used once a policy decision has been taken.

The report highlights that the overall quality of impact assessments, and the extent to which they influence policy decisions, must be viewed within the wider context of the realities of policy making. A predetermined policy agenda can have a far greater influence on government action than the outcome or findings of the impact assessment.

The report also highlights the changes made to the guidance on impact assessment released by the Better Regulation Executive in April 2007. The NAO encourages departments to use the introduction of the new guidance as an opportunity to improve how impact assessments are used, and to develop training and guidance material to support policy makers.

The report makes recommendations aimed at improving the standard and influence of impact assessments by integrating consideration of the need for and impact of regulation into policy making.

"Impact Assessments should be at the heart of the policy making process, but they have not always being used effectively. They need to add to the substance and effectiveness of the policy making process, not be viewed as a box to tick"

Sir John Bourn, head of the National Audit Office

Notes for Editors

  1. Regulatory Impact Assessments have been used since 1998 and 378 ‘Final’ RIAs were produced in 2006. RIAs are required for any form of regulation, including formal legislation, codes of practice or information campaigns, which impact on business, the public sector and voluntary organisations. They allow policy makers to analyse the likely impacts – economic, social and environmental – of a policy change, and the options for implementing it. The Government considers RIAs to be a key tool in delivering better regulation and supporting its aim of regulating only when necessary. The Better Regulation Executive provides guidance on when and how to complete RIAs.

  2. We selected two departments on which to focus our examination: the Department of Health and the Department for Communities and Local Government.

  3. This report is the first of two major NAO reports on the progress of regulatory reform within Government. Regulatory reform covers RIAs, reducing administrative burdens and improving the performance of regulators. In the coming weeks, we publish a report on reducing administrative burdens. Taken together, these reports provide an overview of the current state of regulatory reform within Government."

  4. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.

  5. The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office which employs some 800 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

PN: 32/07