Third of legislation impact appraisals inadequate

25 Jul 11
Almost a third of regulations imposed by the government this year had not had their impact properly assessed, an independent watchdog has concluded.
By Richard Johnstone | 25 July 2011

Almost a third of regulations imposed by the government this year had not had their impact properly assessed, an independent watchdog has concluded. Regulations designating roads Olympic route networks ahead of next year’s Games were among those considered by the RPC this year

A report from the Regulatory Policy Committee shows that 31% of 278 impact assessments carried out in the first six months of 2011 were ‘not fit for purpose’.

These covered issues including equality legislation, immigration limits and traffic law enforcement at the 2012 Olympic Games.

However, the RPC added that this was a significant improvement on the quality of departments’ proposals. Between September and December 2010, 44% of assessments scrutinised failed.

The committee, which comprises business, academic, trade union and consumer representatives, was set up by the Labour government in 2009 to review new regulations. It rates each impact assessment from government departments as ‘red’, ‘amber’ or ‘green’, based on the Better Regulation Executive’s standards.

Red stands for ‘not fit for purpose’, which means the committee has significant concerns about the quality of the evidence provided to support the assessment and recommends changes.

Ministers on the Cabinet’s reducing regulation sub-committee are meant to take the RPC’s opinion into account before considering regulatory proposals.

The Rating regulation report reveals that the Department for Transport has the most red-flagged assessments of any department, at 14 of 48 assessed. The Department for Environment, Food and Rural Affairs was second with 12 red flags from 35 assessments, while half of the regulations put forward by the Department for Communities and Local Government were red flagged – 7 of 14.

The committee has also provided an independent review of the government’s one-in, one-out rule, whereby departments must offset any new regulatory cost on business with cuts to the cost of existing regulation.

The report says that this has proved a challenging discipline on departments that wish to regulate. It has called on the government to understand the real cost to business of regulation by examining whether one-in, one-out could be extended to cover regulators, such as Ofwat, Ofgem and the FinancialServices Authority, which the RPC doesn’t currently monitor.

RPC chair Michael Gibbons said: ‘Around a third of the assessments we assessed were deemed not fit for purpose, a figure that is too high but does show a significant improvement since December last year. This improvement has been delivered by departments responding to the independent challenge provided by the RPC, combined with the firm line that ministers have taken, where we have deemed the evidence and analysis to be not fit for purpose.’

Business and enterprise minister Mark Prisk welcomed the publication of thereport: ‘It’s good to see that the RPC's scrutiny of the regulatory proposals developed by departments is having a real and positive impact across government. The committee is a key tool in our aim of being the first administration to leave office having reduced the regulatory burden rather than increased it.’

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