Introduction to Regulatory Impact Assessment

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Introduction to Regulatory Impact Assessment

• Claire Chaubert
• February 2007

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Regulation
is any government measure that seeks to change
the behaviour of individuals or groups
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What is a Regulatory Impact Assessment?

• .a tool which informs policy decisions. It
  is an assessment of the impact of policy options
  in terms of the costs, benefits and risks of a
  proposal.

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Principles of good regulation

• Proportionality
• Accountability
• Consistency
• Transparency
• Targeting

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When is an RIA done?

• For all policy proposals
• Possible impact on business, charities, the
  voluntary or public sectors
• Even if recommended option is not regulatory
• Major proposals must clear Cabinet Committee
  Panel on Regulatory Accountability, chaired by
  the Prime Minister before they can be cleared by
  other policy committees

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Framework for policy makers

• Evidence-based options analysis
• Risk assessment
• Cost/benefit analysis
• Avoiding unintended consequences
• Effective consultation
• Planned implementation and delivery
• Informed decision-making

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Impact assessment key questions

• Whats the problem being solved?
• Clear rationale - market failures or social
  reason Risk assessment for not acting
• Why is change needed?
• What are the options for intervention?
• Baseline option of doing nothing
• What are the alternatives to classic regulation?
• What are the costs and benefits?
• Wider economic, environmental and social,
  distributional impacts, dynamic effects, e.g.
  unintended consequences
• Who will be affected? (business, public sector,
  charities and voluntary sector, consumers,
  individuals, social groups)
• Do the benefits justify the costs?

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Stages of RIA

• Policy idea development (Initial)
• Consultation (Partial)
• Policy agreement (Final)

Winners and losers, risks, broad estimates of
costs and benefits
Ideas fleshed out, quantitative assessments
Final recommendation, costs and benefits
confirmed following consultation
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RIA drafted by line ministry
RIA PROCESSES
Scrutiny by NAO
Submission to Parliament
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This is what it can lead to
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UK developments

• Currently implementing major improvements to the
  RIAs to address key challenges
• - Inconsistent top-level support
• Variable quality
• Insufficient focus on costs and benefits
• RIAs and Guidance too lengthy
• Consultations skewed
• Increase transparency of analysis of options
• Need to embed culture change
• Ongoing process of learning from experiences

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Revising the Impact Assessment Main Proposals

• Revised template with one-page summary sheet
• Shorter Guidance
• Declaration by Chief Economist to certify the
  quality of the analysis
• A focus on assessing the full range of impacts
  of policy options
• Changing the name from Regulatory Impact
  Assessment to Impact Assessment
• An on-line database of completed Assessments,
  providing a single point of access for
  stakeholders
• Improved training and support to departments

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Revising the Impact Assessment What does Success
look like?

• Impact Assessments developed as policy options
  are being identified and considered fully cycle
  approach
• Decision-makers to expect and have
  high-quality Impact Assessments when they make
  policy judgements
• Clear identification of costs and benefits,
  including disproportionate impacts

• Impact Assessments to be the accepted basis for
  cross-departmental discussion within Government
  on impact of proposals
• Stakeholders outside Government to want Impact
  Assessment because of greater visibility on costs
  and benefits

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More information

• Websites
• www.betterregulation.gov.uk
• www.cabinetoffice.gov.uk/regulation
• www.brc.gov.uk