What can we learn from Europe about regulatory scrutiny?

I recently attended the annual conference of the European Regulatory Scrutiny Board (RSB) in Brussels, where they discuss the work of the RSB and its Annual Report.

The report presents a challenging picture of the quality of European Commission assessments at first submitted – 56% of impact assessments and 41% of evaluations and fitness checks received a negative opinion and showed the improvement to the quality of assessments from going through RSB review.

The areas highlighted as particularly weak were:

• problem definition: not establishing the problem or its causes and framing the problem to justify a particular option
• options: a narrow set of options which insufficiently exposed genuine choices
• impact analysis: omitted impacts, over-reliance on opinion evidence, insufficient analytical depth and failure to acknowledge uncertainty
• comparison and proportionality: insufficiently robust comparison or justification for the preferred option

There are a lot of similarities between the work of the RSB and the Regulatory Policy Committee (RPC):

• we both independently scrutinise impacts assessments and evaluations of existing regulation
• we both comment on the evidence and analysis, rather than the political or policy objectives
• both of our opinions are published and provide quality assurance to our respective decision-making bodies (the European Commission and Parliament)

However there are important differences – here are a few, with my thoughts added.

The RSB holds ‘upstream meetings’ with the Commission services to offer informal targeted advice at an early stage of the preparation of the impact assessment (IA) or evaluation to advise on the intervention logic and chosen methodology for assessing costs and benefits and guide the development of the IA.

While the RPC secretariat has informal meetings with department policy teams, I can see the advantage of informally involving the RPC committee at an earlier stage in policy making. This would support the development of IAs and ensure that our views on the clarity of policy objectives, rationale for intervention and choice of preferred policy option are taken on board at a point at which they can actually influence the IA development.

Unlike the RPC’s role which is purely advisory - ministers can (and sometimes do) take forward legislation where the IA has been deemed ‘not fit for purpose’; if the RSB rates the IA as negative, it must be resubmitted for a second opinion, if it receives a second negative opinion the Commissioner for Economy and Productivity then decides whether and in what form it can proceed.

I actually think that our approach is preferable – in my opinion, it is not for an arm’s-length body like the RPC to block the development of policy of the democratically elected government. However we play an important role in informing parliamentarians and other stakeholders of the quality of the evidence underpinning legislative proposals – good or bad.

Interestingly, one of the RSB’s quality components is ‘readability and clarity’, as part of this it recommends (subject to derogation) a maximum assessment length – 40 pages for IAs and 50 pages for evaluations.

While it would be difficult to keep to such a limit for large multi-part measures (the Employment Rights Bill IA included 23 separate IAs – one for each of the different elements of the bill), I can see the advantages of recommended page limits that encourage departments to set out their analysis concisely and that facilitate the use of IAs by policy-makers and other stakeholders.   

The EU process places far more emphasis on feeding through the results of evaluations into future policy development than does the British approach. I think this is a clear gap in our system that we could learn from. I wrote about this recently in our blog – the EU approach demonstrates that feeding the results of post-implementation reviews into policy development can be effectively integrated in a coherent regulatory framework.