More needs to be done to assess the impact of red tape

1 July 2010

The quality and scope of regulation impact assessments need to improve, a report has recommended.

The National Audit Office (NAO) review of the way that new regulations are judged for their likely effects and costs found that not all assessment processes are consistent.

According to the report, some impact assessments are of a high standard, but wide variation remains between the best and worst.

The NAO said that, while the number of options considered in the assessments has improved, the scope is still too limited. Almost half of the assessments reviewed by the NAO considered only one option, or one option plus a "do nothing" option.

Impact assessments for regulations created by the European Union are often produced only after a decision has been made at EU level, the NAO added.

Amyas Morse, head of the National Audit Office, commented: "It is fundamental to achieving good value for money that the standard of proof applied in impact assessments is high.

"Ministers need to be advised on the range of consequences and risks implied as fully as possible before they take their decisions. This means that departments need to strive for high quality in the impact assessments they produce. Although progress is being made, there is more to do."

Mark Prisk, the Business minister, said: "The findings of this report highlight the pressing need for a change of mindset in government when it comes to regulation and this is something we're determined to achieve.

"The new Reducing Regulation Committee will expect to see all other policy options considered before more red tape is introduced. From now on regulation must be the last resort.

"Impact assessments will now play a greater role in the policy making process, and will be required to provide robust and convincing evidence that any new laws and regulations being proposed are beneficial to the country, helping to promote growth and enterprise."