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Regulations still ignoring adverse effects on businesses

A report has found that government departments are still putting together legislation that affects businesses without due consideration of the cost to firms.

The review, carried out by the National Audit Office (NAO), revealed that 20 per cent of all new legislative proposals failed to provide detail about the costs involved or omitted to set out the benefits.

Acknowledging that some improvements had been made following the government’s commitment to make the regulative process more responsive to business needs, the report nevertheless suggested that Whitehall departments varied in their efforts to produce detailed assessments of the impact of new regulation.

The NAO said that the Better Regulation Executive (BRE) has introduced new guidance, templates and training to improve the quality of impact assessments and, as a result, impact assessments have clearer presentation of results, better planning for implementation, and more quantification of costs and benefits.

But, the NAO continued, “wide variation remains between the best and worst impact assessments”.

Some 60 per cent of impact assessments included £0 for either the costs or benefits of the policy; one fifth of these provided no justification for this assessment. Two thirds of the assessments did not evaluate the cost of enforcing the new regulations once they have been introduced.