Policy

Business regulation

Supporting detail:

Assessing the impact of new regulation

Introducing new regulation is expensive for the government and for business. To keep this cost down, there’s a rule that any policymaker who wants to bring in a new regulation has to look at:

  • the potential effects of the regulation
  • alternatives such as a change to an existing regulation or an information campaign to educate the public

To make sure policymakers do this, they have to carry out an impact assessment (IA). It’s a formal process, where policymakers have to prove they’ve done their research into the likely effects of the proposed regulations – good and bad. They also need to demonstrate that a new regulation is the best option.

We publish all impact assessments so anyone can read them at www.legislation.gov.uk.

Why we publish impact assessments

We publish impact assessments so that the public and businesses can see:

  • why the government is proposing to take a particular action
  • how new policies may affect them
  • the estimated costs and benefits of the policy or action

It’s also an opportunity to identify unwanted outcomes of the proposed regulation.

Scrutiny

Impact assessments are checked by the Regulatory Policy Committee (RPC), an independent body. The Committee decides whether an impact assessment has been carried out correctly and is credible.

The final stage is for policymakers to send impact assessments to the Reducing Regulation Committee (RRC) for review. The RRC, a cabinet sub-committee of ministers, decides whether the case for a new regulation has been made - and either approves or rejects the proposal.

Recent changes have been agreed by the RRC to the requirements for impact assessment and RPC scrutiny. Interim guidance has been published and a full update to IA guidance will be issued shortly.

Guidance

To help government departments produce an impact assessment, we provide the following guidance:

To handle queries on impact assessments, each government department has an expert team in their Better Regulation Unit.

If you have a query on impact assessments, contact the Better Regulation Team at the Department for Business, Innovation and Skills on BetterRegulationTeam@bis.gsi.gov.uk