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Evaluation of Regulatory Impact Assessments Compendium Report 2003-04

In a report today, head of the National Audit Office Sir John Bourn concluded that Regulatory Impact Assessments (RIAs) can improve the regulatory process when undertaken thoroughly, although the RIAs themselves could be improved in some cases.

Sir John’s conclusions were based on an evaluation of 10 RIAs undertaken by a number of Departments, six of which had already been identified by the Better Regulation Task Force as being problematic. This is the first such annual review undertaken by the NAO and, while the sample is not representative of all RIAs or all government Departments it provides a snapshot to help identify and encourage the use of good practice.

The NAO found that Departments were particularly effective in undertaking high-quality public consultation. Consultation was consistently the strongest element of the RIA process. Consultation documents were of high quality, good efforts were made to engage the public and key stakeholders, and for the most part Departments made genuine efforts to consider respondents’ views. Public consultation is important in identifying possible unintended effects of regulations, in lending credibility to the regulatory process, and increasing compliance rates.

Today’s report sets out a number of key actions that Departments need to take in order to obtain the full benefits of RIAs. The problem being addressed and the objectives of regulation need to be clearly stated and Departments should consider a range of options including not regulating. Departments need to take into account uncertainties surrounding implementation costs, expected benefits, and anticipated compliance rates. Finally, Departments should clearly define how they will monitor regulations and assess whether objectives are being met.

"I welcome the Regulatory Impact Assessment process as a rigorous framework for policy making. There were many elements of good practice in the assessments I examined but there was also scope for improvement in some cases. The report highlights these learning points and should help Departments to improve the process. I look forward to working alongside the Better Regulation Task Force and the Cabinet Office Regulatory Impact Unit to help secure improvements in the quality of RIAs so that regulations achieve benefits to society without placing an undue burden on businesses, charities and voluntary organisations."

Sir John Bourn

Notes for Editors

  1. RIAs are undertaken by departments and agencies for new regulations which are expected to have an impact on business, charities and voluntary organisations. Some 200 are produced annually and they are intended to inform the policy decision making process and communicate clearly the objectives, options, costs, benefits and risks of proposals to the public and to increase the transparency of the regulatory process.
  2. The National Audit Office announced on 2nd December 2002 that it would be taking on the new ongoing role of independently evaluating the quality and thoroughness of a sample of Regulatory Impact Assessments (RIAs). After hearings held by the Committee of Public Accounts on the 2001 NAO report Better Regulation: Making Good Use of Regulatory Impact Assessments (HC329 Session 2001-02), the Cabinet Secretary invited the Comptroller and Auditor General to undertake this role.
  3. The Better Regulation Task Force (BRTF) was established in September 1997. It is an independent body that advises Government on good practice in regulation. Its terms of reference are: "to advise the government on action to ensure that regulation and its enforcement are proportionate, accountable, consistent, transparent and targeted." In its 2003 Annual Report, Champions of Better Regulation, the Task Force suggested further study by the NAO of 10 RIAs which it considered to be of poor quality and one example of good practice. The NAO sample included the Task Force's good practice example and six of those the Task Force had suggested as poor. The NAO selected the remaining three based on its own criteria including materiality, complexity and impact, with no prior judgement as to their quality.
  4. The role of the Cabinet Office Regulatory Impact Unit is to work with other government departments, agencies and regulators to help ensure that regulations are fair and effective. The Unit's work includes: promoting the principles of good regulation, supporting the Better Regulation Task Force, and improving the assessment, drawing up and enforcement of regulation, taking particular account of the needs of small businesses, the voluntary sector, charities and the public sector.
  5. Press notices and reports are available from the date of publication on the NAO website,
    which is now at www.nao.org.uk. Hard copies can be obtained from The Stationery Office
    on 0845 702 3474.
  6. 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: 17/04