Assessing the impact of new regulation
The issue
When designing regulations, we need to examine the effect they will have by carrying out an impact assessment. Impact assessments help us identify which proposals will achieve the government’s policy objectives, while minimising costs and administrative burdens.
Actions
For most new regulatory proposals, we require government departments to prepare an impact assessment. Impact assessments force government departments to think through the consequences of any actions.
We are also calling on the European Union to carry out impact assessments on the cost of regulatory burdens to business.
Why we publish impact assessments
Publishing an impact assessment ensures those interested in a policy can challenge:
- why the government is proposing to intervene
- how new policies may impact on them
- the estimated cost and benefits
Impact assessments also give those interested in the process an opportunity to identify any potential consequences, minimising the risk of knock-on effects.
Scrutiny
Impact assessments are scrutinised by the Regulatory Policy Committee, an external body, before they are submitted to the Reducing Regulation Committee as part of final policy approval.
Guidance
To help government departments produce an impact assessment, the following guidance is available:
All assessments need to be published in a standard template (DOT, 427 Kb) to make it easier for scrutiny. Using a standard template ensures the data can be uploaded into a central impact assessment library and used for data analysis. There’s a user manual for the impact assessment template (PDF, 493 Kb) .
To handle queries on impact assessments, each government department has an expert team, the Better Regulation Unit.
Tax Policy Making: A New Appoach
If Departments want to include the possibility of tax as an alternative to regulation, then they should engage with HM Treasury at an early stage, and, providing HM Treasury agree, take the proposal out to a joint consultation using an Impact Assessment, with HM Treasury engagement in the design of the consultation. Should tax turn out to be a favoured option, the proposal should be passed over to HM Treasury (at which point HM Treasury and HM Revenue & Customs will subject the proposal to the Tax Impact Assessment process).
As described in Tax Policy Making: A New Approach, the Government announced on 15 March 2011 that a Tax Impact Assessment, culminating in publication of a Tax Information and Impact Note (TIIN), replaces the regulatory Impact Assessment used elsewhere in Government for all tax changes.
