Red tape drive makes 'slow progress'

24-08-2006

Government efforts to ensure that red tape does not place costly burdens on British business are progressing too slowly, a new report has claimed.

The National Audit Office (NAO) alleges that many Whitehall departments are failing to properly carry out the cost-benefit analyses required for all new legislation and are not assessing the impact of proposed regulations adequately.

The watchdog made its critical assessment in its third report into the government's use of "regulatory impact assessments" (RIAs) – introduced in 1998 by chancellor Gordon Brown in order to ensure that civil servants consider the cost of new rules on companies when drafting laws.

The NAO, which examined a sample of RIAs carried out by four government departments, said that impact assessments were "often not used in the right way", while Whitehall mandarins had been slow to "integrate" them into the policy-making process.

Despite some examples of best practice, notably from the Department of Trade and Industry (DTI), most assessments were "often done too late, with the wrong mindsets and do not cover all policy interventions", the report warned.

The study, which also examined the work of the Home Office, the Department for Transport and the Department for Culture, Media and Sport (DCMS) in measuring the impact of red tape, added that there were "persistent weaknesses" in how the costs and benefits of new regulations were assessed.

"In general, RIAs are still often seen as a paper-output rather than being integral to the process of policy-making," the NAO's report concluded.

Examples of bad practice highlighted by the NAO include the DCMS' failure to consider the impact of licensing reform on the UK's small firms and the DTI's "misleading" impression that employers would face no significant costs following changes to employment tribunal regulations.

The report also stressed that departments had given "little thought" to evaluating the effect of regulations after they were implemented – something which British business organisations have called for.

Commenting in the findings, NAO chief Sir John Bourn said: "Regulatory Impact Assessments are a vital tool for government to ensure that it is not introducing unnecessary or excessive regulation."

"Although they have been in use for several years, many are still failing to perform their intended function properly. Departments must address the reasons why they have been so slow at making improvements to the process of assessing the impact of regulation."

The British Chambers of Commerce claims that new regulations introduced since Labour came to power in 1997 are now costing British companies £50 billion a year to implement.


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