Impact assessment in the UK policy-making

Abstract

This paper documents the UK experience of IA (impact assessment) as a tool for moving towards better regulation. It builds upon the existing body of literature, which documents the UK's experience of IA. It charts the history of IA and assesses the current situation in the context of the use of IA, both by government departments and utility regulators (Ofgem and Ofwat). The objective of the paper is to study the strengths and weaknesses of IAs in the UK and identify areas for further improvement. The paper begins with an introduction to the concept of regulation, the principles of a better regulation, and the role of IAs in moving towards better regulation. It then looks at the institutional structure within which IA is undertaken and the organizations that play a key role in the evaluation of IAs. The UK has a strong base of RIA (regulatory impact assessment) experience and is doing well in some areas like public consultation, streamlining the IA process, and improving accountability. However, it still lags behind in many areas like monitoring and evaluation, and quantification of costs and benefits. One of the biggest areas of concern is that in many cases IAs are being initiated after the policy decision has been taken. This negates the entire objective and purpose of undertaking IAs. The research methodology included a study of the existing literature on the subject and interviewing a range of stakeholders, including academicians, regulatory agencies, and the National Audit Office, UK.