Over the years, various public bodies have tried to roll back the tide of Whitehall regulation – with little success. The latest is the Regulatory Policy Committee: Ben Willis reports on an attempt to embarrass erring departments.
Every year, Whitehall departments publish numerous proposals for new regulations. This calendar year alone, 66 of the 117 consultations issued across government have contained regulatory policies, covering areas ranging from cigarette vending machines to the disposal of agricultural plastics.
But it is now becoming clear that departments are not always adequately demonstrating the need for their regulatory proposals. Since January, a new body, the Regulatory Policy Committee (RPC), has been monitoring all proposed regulations coming out of Whitehall. The RPC’s role is to scrutinise the impact assessments which departments must now publish to demonstrate evidence of the need for a new regulation; in its initial months of operation, the RPC has found this evidence in some instances to be inadequate.
“In nearly a third of the cases we’ve examined, departments are failing to assess the full impact of proposed regulation,” the committee’s chairman Michael Gibbons told Civil Service World. “For example, they’re failing to quantify many of the costs and benefits, and not showing that the policy option selected will achieve its objective. This isn’t just a matter of failing to tick the right boxes – the practical implications, including costs, are considerable.”
It was to put an end to the unintended consequences of poorly thought-through regulation that the RPC was launched last year. The concept of the body grew out of the better regulation agenda, which set out to ease the burden of bureaucracy and red tape on the public, private and charitable sectors. Unlike previous organisations set up to deliver this objective, such as the Better Regulation Task Force, the Better Regulation Commission and the Risk & Regulation Advisory Council, the RPC has a specific role in scrutinising all new regulatory policy as it emerges from Whitehall.
According to Gibbons, this distinction is an important one, and potentially makes the RPC a powerful force in driving up standards in the formulation and implementation of regulatory policy. “We look as a matter of course at all new proposals for regulation, and we’ve developed a process that allows us to scan everything that’s coming out of government,” he says. “That process – looking systematically and then publishing an opinion where appropriate – has never been done before.”
When it trawls through the impact assessments published alongside proposed regulations, the committee either gives each a green light if it is properly evidenced, or an amber light if not. Those receiving amber lights are subjected to further scrutiny, involving discussions with sponsor departments. If the committee still has concerns, it publishes a critique of the impact in the form of an ‘opinion’ on the committee’s website.
Of the 66 consultations with regulatory implications published this year, 47 have been within the RPC’s scope: the committee only examines those consultations that contain impact assessments, and doesn’t cover some fields such as taxation and financial services. So far, the commission has published ‘opinions’ on 10 regulatory proposals, with another five in the pipeline. This means over 30 per cent of the regulatory output from Whitehall this year has, in the RPC’s view, “failed to make the case”, as Gibbons puts it.
Committee members have noticed a number of themes emerging among the shortcomings identified in impact assessments. According to Sarah Veale, who apart from sitting on the RPC is also head of equality and employment rights at the TUC, one common failing is the misuse of statistics to justify policy proposals.
“I’m not an economist, but the numbers don’t always stack up, and some impact assessments are either measuring the wrong thing or they’re trying to assess a benefit where the benefit is simply that something bad doesn’t happen,” Veale says. “There’s a tendency [on the part of the civil servant] to think, ‘I’ve got to get through this assessment, I’ll slap on some figures that look roughly like they might be right’, when if you ask questions, they’re not.”
In general, Gibbons says, the impact assessments deemed inadequate fail to explain from the outset how proposed regulations will achieve their policy objective. For example, one critical opinion issued by the RPC concerned the Department of Health’s proposal to cut smoking among under-18s by restricting access to tobacco vending machines.
“The evidence set out in the impact assessment for that doesn’t provide a specific link between the proposed measure and a reduction in smoking by under 18s, the policy objective,” says Gibbons. “Evidence that people are accessing cigarettes from vending machines does not in itself show that the new regulation will lead to reduced smoking, because under-18s may still access cigarettes from other sources, and that didn’t seem to be assessed in the proposal.”
Although the committee has no formal powers to force departments to respond to its criticisms, Gibbons believes the risk of censure will force departments to raise their game. Meanwhile, the Better Regulation Executive, which sits within the Department for Business, Innovation and Skills and has overall responsibility for impact assessments across government, is keen to see departments acting on the committee’s recommendations.
“The BRE expects departments to work closely with the RPC to address the concerns raised,” says a BIS spokesman. “External scrutiny provides a strong incentive for departments to improve impact assessments. By drawing attention to poorly evidenced measures in this fashion we would expect departments to act on this feedback appropriately, and therefore we should see an improvement in quality as a result.”
But that’s not to say it will always be straightforward for departments to get impact assessments right. Sir Nicholas Monck is a former permanent secretary of the Department of Employment and a member of the Better Government Initiative, a body of former senior civil servants that produces occasional reports on managing change in government. Last year it published a document, Good Government, in which it highlighted the crucial role of impact assessments in all new policy, not just that concerning the regulatory sphere.
“[The RPC’s assessment] chimes with the experience registered in our report of people doing things from the hip without genuinely careful thought,” Monck says. “But [impact assessment is] difficult to do seriously and takes time to do properly. Costs to government should be easy to find out, but costs to business are quite hard to find out, and benefit is always a hard thing to quantify.”
The RPC has yet to publish any indication of what it regards as best practice, although Gibbons acknowledges this will be required soon to help departments through the process. In the meantime, RPC board member Philip Cullum, the deputy chief executive of watchdog Consumer Focus, points out that officials involved in preparing impact assessments should remember that the process is intended not as a chore but as a spur to better policymaking.
“You get a sense from reading these impact assessments that a lot of work and a lot of heartache has been involved as people have dutifully slogged through producing them,” he says. “That’s not how it should be; they should be an aid to making decisions, not something that’s a pain in the backside.