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Is regulation working as intended?

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The purpose of evaluating regulations after they are introduced

An effective regulatory framework should review regulations after implementation to see if they are working as intended or need to be revised. This is the purpose of Post Implementation Reviews (PIRs). Done well, they should:

  • lead to a better understanding of the regulation and the problem it was meant to address
  • support more realistic and useful/persuasive future impact assessments (IA)
  • enable better contributions and challenge from others, such as parliamentarians
  • inform decisions over whether regulation should be retained, revised or removed

However, between 2016 and 2018, 72% of required PIRs were completed on time, and this dropped to below 40% in the last 2 years (partly due to the pressures of COVID-19). The problem is long term and systemic.

Current obligations and context

Section 28 of the Small Business, Enterprise and Employment (SBEE) Act, 2015 places a statutory duty on ministers to either:

  • review provisions in secondary legislation regulating business and/or voluntary and community bodies; or
  • publish a statement that it is not appropriate in the circumstances to do so

The deadline for completion of PIRs is generally 5 years from the measure coming into force. However in practice, PIRs are often:

  • not conducted at all, despite statutory requirements
  • limited to only using the evidence that happens to be readily available
  • conducted by people who are far removed from the regulation’s implementation and with limited understanding of its impacts
  • ignored by those charged with making subsequent or related policies
  • neither shown to, nor used by, other stakeholders in the policy process
  • very rarely, even when completed properly, do they lead to modifications to the regulations being reviewed

What PIRs should deliver

A good PIR should address the following key questions:

Looking backwards

  • Were the original objectives achieved?
  • Were there any unintended consequences?
  • Was this as a result of the intervention?
  • Would they have been achieved anyway?
  • What other impacts (beneficial or otherwise) can be attributed to the intervention?

Looking forward

  • Is regulatory intervention still required? Have subsequent changes rendered the measure obsolete or counterproductive?
  • Is the case for intervention still valid? Is this supported by external evidence sources?
  • Have stakeholder opinions changed and have they been consulted?
  • Might alternatives to regulation now be more appropriate?
  • If the current regulation is still required, what refinements could/should be made?

The current position and suggestions for reform

The current Review of the Better Regulation Framework is considering bringing PIRs forward to 2 years after the regulation comes into effect (from the present 5 years). Earlier evaluation would be welcomed (although sufficient time needs to be allowed to pass to properly see the impacts of the regulation). However to be effective, PIRs need to be given greater ministerial and political importance than currently.

Perhaps the 2 most obvious reasons for the current under-performance are:

  • the evidence needed to evaluate measures is not available or up to date
  • there is little incentive to conduct them well or make best use of them

If evidence is to be available to evaluate a regulatory measure properly, information needs to be gathered from its introduction with the PIR in mind. This requires an effective monitoring and evaluation (M&E) plan which sets out the evidence to be gathered to support the PIR. IAs should already contain plans for M&E, but at present over 1 in 5 IAs that we have reviewed have ‘weak’ or ‘very weak’ M&E plans. We are currently unable to ‘red rate’ IAs on inadequate M&E plans (but do provide comments on them in our opinion). One way to improve the quality of evidence underpinning PIRs would be to allow opinions explicity to ‘red rate’ the IA’s M&E plans.

The current political governance structure does not lend itself to ensuring priority is given to PIRs (unlike IAs which are required to be laid before Parliament alongside the legislation, together with the associated RPC opinion).

One possible way forward would be by giving responsibility for evaluation to a dedicated cross-departmental function within government (potentially located in the Cabinet Office or BEIS) with the power to effectively ‘call out’ ministers or departments that do not meet their PIR obligations, but we recognise that there may be alternative, more effective ways of ensuring that PIRs are properly undertaken and acted upon.

This could be supported by an explicit requirement to adopt an ‘evaluate first’ approach to new regulation – ensuring that the effectiveness of the existing regulatory landscape is evaluated before any new regulations are proposed. This could be incorporated as a required element in pre-consultation stage IAs.

We encourage anyone with an interest in these issues or suggestions of other ways to improve the evaluation of regulations to respond to the government consultation. The deadline for responses is 1 October 2021.

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