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Evaluation of Regulatory Impact Assessments Compendium Report 2004-05

Sir John Bourn, head of the National Audit Office, said today that there were examples where the Regulatory Impact Assessment (RIA) process had helped departments to develop a better policy proposal. But there were also cases where its impact was limited because it had not been an integral part of the policy making process. Sir John’s conclusions were based on the NAO’s second annual evaluation of ten RIAs. The sample was based on a selection that the Better Regulation Task Force suggested and contained elements of good and bad practice.

The NAO found that some RIAs were of good quality and were part of the policy-making process. These informed and challenged policy-making. Out of its sample of ten, one case even led a Department to decide not to use regulation at all. However, some RIAs had only a limited relevance in policy-making and some were done merely because they are mandatory and did not inform the policy process at all. The NAO accepts that even where RIAs have only a limited influence on policy making, they nevertheless provide a useful tool for communicating the reasons for, and expected impacts of, a Department’s decisions. But such RIAs are not fulfilling their primary role.

"Regulatory Impact Assessments are a powerful tool that can inform and challenge policy-making. I found in my evaluation that, as in last year’s sample, there were many elements of good practice in the assessments but there was also scope for improvement. It is no longer acceptable that departments just go through the motions of preparing RIAs that do not affect the policy making itself. I urge departments to produce RIAs that are started early, fully resourced and of good quality."

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 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. Today’s report is the second Compendium of findings from the evaluations. The results of the first year's evaluation were published in the C&AG's report: Evaluation of Regulatory Impact Assessments Compendium Report 2003-04 (HC358 Session 2003-04).
  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 2003-04 Annual Report, The Challenge of Culture Change: Raising the Stakes, the Task Force suggested further study by the NAO of a selection of RIAs, some of which it considered to be of poor quality and some of which were examples of good practice. The NAO sample included nine of the Task Force's suggestions. The NAO selected the remaining RIA based on its own criteria including materiality, complexity and impact, with no prior judgement as to its 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: 25/05