Source · Select Committees · Public Accounts Committee
Recommendation 16
16
The Department told us that RIAs currently consider the cost impact of regulations without an...
Conclusion
The Department told us that RIAs currently consider the cost impact of regulations without an adequate assessment of the benefits. For example, the costs of complying with gambling regulations for gambling companies are captured, but the benefits of those regulations in reducing crime are not. Similarly, the costs to landlords of tenant fee regulations are counted, but the benefits to tenants from these regulations are not.31 The Competition and Markets Authority (CMA) has also criticised RIAs for not giving 25 NAO report, pages 34–35 26 HC Committee of Public Accounts, Consumer Protection, 107th report of Session 2017–19, HC 1752, July 2019 27 Qq 43–44 28 Q 45 29 Q 46 30 Department for Business, Energy & Industrial Strategy, Business Impact Target Statutory Guidance, January 2019 31 Q 70 Principles of effective regulation 13 enough consideration to the impact of regulation on competition and innovation, increasing the risk that regulatory measures may have major unintended impacts on competition and innovation.32 The Department accepted that the process for integrating competition assessments into RIAs could be improved, but told us this must be balanced with ensuring the process itself is not so burdensome on regulators and departments that it delays the delivery of policy objectives. The government has committed to reviewing the Business Impact Target framework, with the aim of ensuring the approach in future better recognises both the costs and benefits of regulation. The Department expects to launch this as a consultation exercise later this year.33 Outcomes-focused regulation
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.