Source · Select Committees · Public Accounts Committee
Recommendation 13
13
Robust performance measurement and evaluation, including analysis of the costs and benefits of regulatory activity,...
Conclusion
Robust performance measurement and evaluation, including analysis of the costs and benefits of regulatory activity, are essential for effective regulation. They can help evidence value for money, provide insight into unintended outcomes, and help to refine interventions to improve outcomes. Good monitoring and reporting can also support accountability to Parliament and the taxpayer.25 In its 2019 report on the actions of Ofwat, Ofgem, Ofcom and the Financial Conduct Authority (FCA) to protect consumers in their sectors, this committee concluded that the regulators did not yet have a good enough understanding of their own impact and effectiveness in protecting consumers.26
Government Response
Not Addressed
HM Government
Not Addressed
4.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2021 4.2 This work is already underway and reforming the Business Impact Target to accurately capture the impacts of regulation is a fundamental part of the “Reforming the framework for better regulation” consultation, which was open to the public to provide responses from 22 July 2021 until 1 October 2021. 4.3 The current BIT framework allows for the financial impacts of regulation to be captured accurately. It does not lend itself, though, to capturing the wider impacts of regulation, such as its impact on innovation. The consultation therefore invites views on how to capture better the regulatory costs and benefits. The consultation provides four options with regard to the metric – adjust the current system, change it, replace it or remove it. The choice of metrics used (and which of the four options of adjust the current system, change it, replace it or remove it is chosen) will impact upon the ability to measure less clearly defined concepts such as innovation, competition, wellbeing, and security. 4.4 The government’s proposals to improve the analysis of regulatory costs and benefits will be set out in the consultation response. The response will also consider regulators’ role in the promotion of competition and innovation and whether to revise existing guidance and statutory objectives.