House of Commons - Environment, Food and Rural Affairs

Select Committee on Environment, Food and Rural Affairs First Report

7 Defra's Regulatory Impact Assessment

270. Government departments proposing new legislation are required by the Cabinet Office to produce a Regulatory Impact Assessment (RIA) to support their case for legislative change. RIAs must meet Cabinet Office and National Audit Office (NAO) guidance. Defra has prepared a RIA for the draft Bill, which is published in the same document as the draft Bill.[210]

271. The Cabinet Office describes an RIA as "an assessment of the impact of policy options in terms of the costs, benefits and risks of the proposal."[211] Cabinet Office and NAO guidance requires that an RIA should also consider the full range of impacts of increased legislation on all stakeholders, including businesses, charities and the voluntary sector.[212] To support the case for legislative change, an RIA should clearly demonstrate that the benefits of proposed legislation exceed the costs.

Options appraisal and anticipated benefits

272. Cabinet Office and NAO guidance states that departments should carefully consider alternatives to regulation. Defra has identified three options:

option 1: doing nothing

option 2: having a voluntary system of self-regulation, and

option 3: proceeding with the draft Bill.[213]

Defra describes the first two options as having "no benefits".[214]

273. NAO and Cabinet Office guidance requires that an RIA should include an assessment of costs and benefits, as this is "the central analytical component" and one of the "most essential aspects" of an RIA.[215] The guidance requires departments to quantify costs and benefits as much as possible and, where this is not possible, to offer a detailed qualitative description.[216] The RIA asserts that, if it is enacted, the Bill will improve animal welfare. However, Defra does not quantify or explain the anticipated improvement more specifically. Without such detail, Defra cannot clearly demonstrate that benefits exceed costs, thereby undermining the case for legislative change

274. Given that Defra has had well over two years since its initial consultation on the draft Bill in January 2002, we are both surprised and concerned that the appraisal of alternatives to regulation in the Regulatory Impact Assessment accompanying the draft Bill is not better developed. Defra's excessively simplistic assessment of options fails to quantify the benefits of the legislation or its alternatives, which limits Defra's ability to demonstrate that the benefits of the proposed legislation would exceed the costs.

Resource implications

275. The RIA addresses the likely costs to business arising from the draft Bill in some detail. However, the stated costs appear to be based on often weakly evidenced cost assumptions and limited information. Defra intends that "each piece of secondary legislation will be subject to a separate RIA and consultation once it is decided to take forward work on that particular regulation/order", indicating that there is still much work to be done in assessing the likely resource implications of proposed secondary legislation.[217] Defra also admits it cannot limit the costs of licences and that it does not always know the numbers of organisations likely to be affected by the draft Bill: "it is not clear exactly how many animal sanctuaries there are in England and Wales …"[218] Estimates used to derive total costs for all organisations could therefore result in significant variations in compliance costs for all businesses affected by the draft Bill.

276. Other cost assumptions are unsupported. For example, it is not clear why circus licences should be two-thirds of the cost of zoo licences.[219] Animal Defenders International and the National Anti-Vivisection Society argued that this figure was far too low: "at just £50 more than a colour television licence for the same period, ADI believes that this gives entirely the wrong message."[220]

277. Defra describes the likely costs to enforcement authorities of enforcing the new legislation as "negligible".[221] It does not believe that any additional expenditure will be incurred by local authorities, "as an increase in some responsibilities will be matched with reduced inspection requirements."[222] Defra fails to explain why it believes that increased regulation and licensing correlate with reduced inspection requirements, particularly as inspections are set out as a compulsory requirement of licensing in annex L. Neither does Defra give an anticipated time scale for the expected reduction in inspections.

278. In the context of enforcement, the RSPCA estimated that, if the Bill comes into force, "there will probably be an extra 100 or so prosecutions to begin with", due to the effect of the clause 3 welfare offence. However, the RSPCA believed that in the longer term the number of prosecutions brought under the clause 1 cruelty offence could be expected to decline because of the educative effect of clause 3.[223]

279. We received evidence which suggested that many enforcement authorities may lack the resources and skills to implement any Act arising from the draft Bill effectively. The Companion Animal Welfare Council identified three significant enforcement issues:

First the question of resources. There is no indication that central government will make additional funds available, and we do not expect local authorities will have surplus resources readily available. The second issue relates to expertise. We are aware that there are some local government officials who have extensive knowledge and experience of matters relating to animal welfare, and whose work is to a very high standard … however, it is our impression that in many local authorities, those carrying out work relating to animal protection and welfare have little expertise or relevant training. Finally, we would draw attention to the low priority that this work has in many local authorities. Given their other responsibilities, this may be understandable. Nevertheless, it is clear to us that the present situation is untenable if the legislation is to be effective.[224]

280. Other submitters were concerned that local authority inspectors, vets and even the RSPCA did not have sufficient resources or skills to enforce animal welfare requirements in all situations, for example, at animal fairs. BirdsFirst argued that "most UK vets receive little or no formal instruction in avian medicine before graduating."[225] The Animal Protection Agency believed that "recognising stress in exotic animals at markets falls outside of the realm of a veterinary inspector and would require a behaviourist who specialised in birds or reptiles—of which there are very few. RSPCA inspectors also lack the necessary expertise to monitor exotic pet markets."[226]

281. The Minister acknowledged that the draft Bill would impose "extra responsibilities on local authorities".[227] He told us that Defra was considering the financial help it could give to local authorities, but he anticipated that the "burden will fall on those premises that, as a result of the secondary legislation, for the first time are brought under a licensing or regulatory regime. They will have to pay a fee to cover the full cost."[228] He was emphatic that local authorities would be expected to operate their licensing services on a cost-recovery basis:

local authorities will be expected to charge for these services and, through any charging mechanism, will be expected to recoup their costs. There is no reason why they should not be able to do this.[229]

282. Defra's assessment of the probable enforcement costs arising from the implementation of the legislation as "negligible" appears to us to be simplistic in the extreme, for the following reasons:

Defra appears to have ignored the probable increase—at least initially—in prosecution and conviction numbers from the new offences which the draft Bill would create.

Defra does not appear to have accounted for the fact that proposals in secondary legislation will require appropriately skilled personnel to provide enforcement and inspection services and veterinary expertise in newly regulated areas such as animal sanctuaries, livery yards and greyhound tracks. We received evidence suggesting that there is a significant skills shortage in these areas and we are therefore concerned that the Regulatory Impact Assessment does not quantify what extra resources will be required nor how they will be provided. The Regulatory Impact Assessment states that "each piece of secondary legislation will be subject to a separate RIA and consultation once it is decided to take forward work on that particular regulation/order", which suggests to us that Defra has given no detailed consideration to the likely resource implications of its proposed secondary legislation.

Defra has proposed that local authorities should operate their licensing services on the basis of full cost recovery, yet the practicalities of this proposal are nowhere discussed in the Regulatory Impact Assessment.

The RIA as a whole

283. We consider that the Regulatory Impact Assessment accompanying the draft Bill fails to demonstrate that the benefits of the proposed legislation would exceed the costs, as is required by Cabinet Office and National Audit Office guidance. The Regulatory Impact Assessment shows evidence of a lack of thorough consideration, on the part of Defra, about the likely consequences of enacting the draft Bill. It fails to demonstrate what measurable benefits would arise from enactment and provides only weakly evidenced and limited cost information. We are concerned that Defra's poor assessment of the likely long-term implications of the draft Bill, together with the extent to which Defra proposes to defer policy decisions to secondary legislation, indicates that Defra is not yet properly prepared to legislate in this area. We therefore consider that the Regulatory Impact Assessment lacks credibility and provides an inadequate basis for pre-legislative scrutiny.

284. Consequently, we recommend that, before a final Bill is introduced to Parliament, Defra produces a new Regulatory Impact Assessment which better meets the requirements of Cabinet Office and National Audit Office guidance. The revised Regulatory Impact Assessment should include:

a more thorough options appraisal

a quantification of benefits

a more comprehensive consideration of costs, including the costs of secondary legislation

evidence to demonstrate that full cost recovery by local authorities is a realistic operational objective, and

evidence to demonstrate that sufficient appropriately skilled personnel exist to provide enforcement and inspection services and veterinary expertise in newly regulated areas such as animal sanctuaries, livery yards and greyhound tracks. If such evidence is not available, Defra should explain how it proposes to address this shortage.

285. We also recommend that, in order to gauge whether costs are accurately reflected in its Regulatory Impact Assessment, Defra consults with the appropriate authorities about the likely costs of enforcement, licensing and inspection.

210 Draft Bill document, pp 74 ff Back

211 Cabinet Office, Better Policy Making: A guide to Regulatory Impact Assessment, para 1.1 Back

212 ibid., para 1.6 Back

213 RIA, paras 25 to 29 Back

214 RIA, paras 30 to 32 Back

215 Cabinet Office, Better Policy Making: A guide to Regulatory Impact Assessment, paras 2.27 to 2.28 Back

216 ibid., p17, para 2.39 Back

217 RIA, para 51 Back

218 RIA, annex E Back

219 RIA, annex A Back

220 Memorandum from Animal Defenders International and the National Anti-Vivisection Society [not printed in its entirety], para 129 Back

221 RIA, annex L Back