The Regulatory Policy Committee has used its annual report to voice concern at the quality of Whitehall departments’ impact assessments on the effect of proposed regulations on business.
Against the backdrop of anticipated building regulations changes following last month’s Grenfell Tower tragedy, the independent advisory body also called on departments and regulators to come forward with wider-ranging impact assessments for new proposals, taking into account the effect on society as well as industry.
The RPC said that in 2016-17 just 69% of impact assessments submitted by departments and regulators had been considered fit for purpose. Although the figure is a improvement by 1 percentage point on the previous year, the body said it was “concerning” that impact assessments were the area of its work where submissions were most frequently unacceptably poor.
Factoring in other types of submission from departments and regulators – such as post-implementation reviews and so-called EANDCB (Equivalent Annual Net Direct Cost to Business) validations – the combined departmental and regulator fit-for-purpose rating was 76%.
The report said there had been “encouraging improvement” in engagement with some departments, and cited both the Treasury and the Department for Communities and Local Government as particular examples.
But it added: “It remains the case that those departments who have least engagement with the framework and process tend to have lower relative markings.”
The RPC said the Department for Exiting the European Union and the Department for International Trade had begun to engage with it, and that the committee was “developing our approach to the unique challenges posed by the assessment and scrutiny of EU exit and trade-related measures”.
The RPC report noted a “worrying decline” in departments and regulators’ perceptions of its case handling. It said overall satisfaction with the RPC process had fallen to the lowest level since the start of the 2015-17 parliament, and the most recent survey gave an experience rating of 6.3 out of 10, which was lower than average for the whole period.
According to the report, the most common complaints concerned the length of the process and the overall burden the system placed on policy teams, particularly in relation to “small measures”.
The RPC said it planned to give departments routine feedback reports on the progress of their cases and boost its support and guidance offer as part of a package of measures designed to improve its approval ratings.
Committee chair Michael Gibbons said the RPC had included reference to feedback from departments and regulators in the report to signal its own transparency in the process.
He said it would be speculation to guess what factors may lie behind departments' experiences, but noted the pressures that Whitehall is currently operating under and their potential impact on capacity.
"There have been a lot of changes of personnel and some people have moved on to other things, including Brexit," he said.
But he insisted departments' work in assessing the impact of new regulations was "as important as ever".
Elsewhere, the RPC said that following June’s Grenfell Tower tragedy – in which at least 80 people are believed to have died – it hoped that the government’s analysis of proposed changes to regulation would take “all significant impacts into account”.
“Quality assurance of the evidence base for changes, whether regulatory or deregulatory, is necessary and that wider impacts and risks on society should be scrutinised, as well as those relating to business costs and benefits,” the report said.
Gibbons stressed to CSW that the RPC's interest was in getting impact assessments that were as robust as possible on proposed regulation.
However, he added: "It's clear that Grenfell Tower has changed the mix of consensus about regulation."
The RPC report added that the ability for it to “red rate” proposals on the basis of wider impacts reports would be “a significant” improvement on the current process.