Conclusions and recommendations
1. In
the absence of a viable alternative to Regulatory Impact Assessments
(RIAs), the RIA process must be regarded as an appropriate, if
far from ideal, platform for integrating sustainable development
into policy decisions. However, if the RIA system is to prove
an effective tool for achieving the aim of fully integrated consideration
of environmental impacts a number of key changes will be required,
not least to its structure and purpose. (Paragraph 11)
2. The problems and
limitations set out by the National Audit Office (NAO) in its
briefing document to the Committee need to be resolved and the
RIA recognised as a valuable and necessary input into the decision-making
process. This will only be achieved through a concerted commitment
from above to establish RIAs as an essential factor in considering
policy, complemented by improved training and guidance to facilitate
the production of RIAs, improve their quality and promote the
process amongst officials. This remedy, like many of the other
more specific steps suggested by the NAO in its 2005-06 review
of RIAs, is directly related to the actions required to promote
and reinforce the consideration of sustainable development within
the RIA process itself. (Paragraph 14)
3. We strongly believe
that RIAs should be used as a tool for ensuring policies meet
objectives that stretch beyond the economic sphere to embrace
environmental concerns. The RIA process must be directly engaged
in transferring the principles of sustainable development and
integrated decision-making from rhetoric to reality, principles
which are currently often neglected by the focus on minimising
regulation. We believe that the changes proposed in this report
would assist in achieving this aim. (Paragraph 16)
4. In the wake of
the Stern Review, and the very real economic costs of inaction
which it highlights, it is no longer viable to view environmentally-minded
regulation as a straitjacket to industry. Especially in the case
of the environmental technology and services industries, regulation
can play a crucial supporting role. We reiterate the call made
in our predecessor Committee's report for RIA guidance to be strengthened
in order to ensure that RIAs adequately recognise and consider
the contribution that would be made by a flourishing environmental
industries sector. (Paragraph 22)
5. Regulation and
policy are conceived with clear objectives in mind, and it is
only to be expected that impact assessments initially concentrate
on those areas which relate most directly to these objectives.
Similarly, certain RIAs will necessarily be required to assess
a crucial technical point in some detail. However, it must be
ensured that the impact assessment grows to encompass all relevant
issues, beyond this initial, limited scope. The principle adopted
by the Better Regulation Executive (BRE) that an RIA should be
proportionate to the risk posed by the policy idea should not
preclude a reasonable examination of all possible impacts. The
unsatisfactory level of assessment of the fundamental issues behind
a policy is of particular concern for us, as it is often in the
wider context that the sustainable development strategy is best
evaluated, and most frequently neglected. (Paragraph 25)
6. We call for each
RIA to include a compulsory assessment of the carbon impact of
the policy concerned. This figure should be clearly displayed
on the summary sheet for each RIA, and the document should make
clear the context in which the significance of the figure should
be gauged. However, we do not view an assessment of carbon emissions
alone as an adequate illustration of the complex and wide-ranging
field of environmental impacts, and call for guidance and training
to make clear to officials the need to analyse and assess environmental
impacts of all kinds, beyond the concerns of carbon and climate
change (Paragraph 32)
7. All relevant environmental
impacts must be identified and assessed within an RIA, including
the economic and social costs of environmental damage. Environmental
impacts cannot continue to be regarded as an isolated concern.
Regulatory Impact Assessments must acknowledge that environmental
damage has consequences for all spheres of development, and ensure
this is presented clearly. (Paragraph 33)
8. We support the
recommendation of the Sustainable Development Commission that
the Public Service Agreement (PSA) targets of Government departments
should include an overarching sustainable development objective.
We feel that this would increase the prominence of sustainable
development objectives throughout departments, and focus attention
on RIAs as a means to ensure these aims are achieved. This would
ultimately lead to improved systems and methods for taking account
of sustainable development concerns as they came to occupy a necessarily
higher-profile position within the decision-making process. (Paragraph
35)
9. We support the
NAO's suggestion of requiring a null response for the assessment
of environmental impacts to be included in each and every RIA.
We feel that this will lead to a more complete standard of analysis
and a culture whereby environmental impacts are viewed as an essential
component of any assessment. (Paragraph 36)
10. In spite of the
new emphasis on the economic cost of climate change in the wake
of the Stern Review, we do not consider monetary totals alone
as appropriate for adequately conveying the extent and coverage
of all adverse environmental impacts. It is difficult to see how
an appropriate monetary total could be arrived at which would
adequately communicate the impact of species loss, or the consequences
of climate change on a global scale, and it is unrealistic to
expect officials carrying out RIAs to be able to achieve this.
(Paragraph 42)
11. We believe that
the RIA system as it stands must be reconsidered to ensure that
non-monetised assessment can be successfully included, and that
it also must be recognised as a standard and suitable form of
assessment, rather than an undesirable last resort. We recognise
that the field of quantifying and assessing environmental impacts
is an expanding one, and that considerable effort is being directed
into research towards developing new techniques. We do not, however,
consider blanket monetisation to be a desirable or feasible objective
of impact assessment. (Paragraph 45)
12. It is deeply unsatisfactory
for environmental impacts to be omitted from an RIA purely because
the structure does not easily permit the forms of assessment which
may most suitably convey their importance, or because there is
a reluctance among officials to approach impact assessment in
a non-monetised manner which is seen to contradict the conventions
for RIAs. (Paragraph 46)
13. We continue to
support the recommendation made by our predecessor Committee that,
on the RIA summary sheet, environmental impacts should be broken
down and categorised in non-monetary terms on a plus/minus 7 point
scale. We believe that this will help to break the reliance on
monetisation and will lead to a more effective communication of
environmental impacts. We also urge the BRE to work more closely
with academic groups and the private sector to investigate and
consider techniques used successfully elsewhere for environmental
assessment. (Paragraph 48)
14. It is vital that
officials are provided with the expertise and support to ensure
that any assumption acting as the basis for an impact assessment
is as well-informed as possible. For this to happen officials
must have clear and helpful guidance; the appropriate training
and knowledge, in addition to access to more specialised expertise
within the department; a thorough consultation programme; and
a clear process of review, scrutiny and evaluation. (Paragraph
51)
15. Although we are
in favour of a short summary sheet for the RIA document as recommended
in our last report, we are concerned that an increasing reliance
on short, monetisation-based summary sheets might lead to decisions
being made without considering the full conflicts, assumptions
and difficulties behind the figures, or indeed what the impacts
actually mean. This is a particular problem for environmental
impacts, which we believe are currently neglected on the summary
sheet due to the emphasis on monetised figures and trading costs
against benefits. (Paragraph 54)
16. We recommend that
the RIA summary sheet should require a yes/no answer for each
of the principles of sustainable development, and that a separate
section prominent within the main body of the document (referenced
from the summary sheet) covers the assessment behind each of these
responses in more detail. Sustainable development can only be
fully integrated into policy making if it is recognised as the
definitive component for developing and reviewing impact assessments.
(Paragraph 57)
17. We urge the BRE
to consult with industry and academic groups on impact assessment
best practice, concentrating on environmental impact assessment
in particular. This opportunity to develop RIA best practice by
drawing on varied and experienced sources should not be neglected.
(Paragraph 59)
18. Better Regulation
teams must have adequate resources to adapt to the rapidly rising
quantity and complexity of RIAs, and to the new demands placed
upon them as the RIA process comes under greater scrutiny. (Paragraph
59)
19. We are encouraged
by the positive approach taken to consultation, as described by
the NAO, but we feel the process needs to be strengthened to ensure
that this good practice is extended consistently across different
RIAs and departments. In particular, we would like to see the
RIA guidance strengthened to emphasise the importance of consulting
on environmental issues, given the support and insight this could
provide to officials struggling to assess intangible environmental
impacts. We would also like to see the RIA guidance emphasise
the role of the consultation process for discussing the merits
of the RIA itself, rather than dwelling solely on prolonged discussion
of the policy. We encourage the BRE to build relationships with
key businesses and organisations implicated in and affected by
environmental impacts, in order to provide RIA officials with
a starting point for consultation on these matters. (Paragraph
64)
20. The current programme
of training offered for RIAs seems inadequate given the often
daunting nature of the task facing officials. We believe that
those involved in producing RIAs at all levels should be engaged
in a comprehensive and regular programme of training, focusing
exclusively on RIAs. This training should be consistent between
departments and should be compulsory. No official should be assigned
to an RIA project without first having undergone the appropriate
training. Given the particular difficulties in the area of environmental
impacts, we recommend that training tackle this subject explicitly
and at some length, dealing with the likely challenges officials
may face, and how these could be overcome. Training of this type
would also lead to a greater awareness of environmental impacts,
improving the coverage of such issues in RIAs. (Paragraph 67)
21. We would like
to see the RIA guidance provided by the BRE strengthened in terms
of how it promotes and deals with sustainable development. We
are concerned that sustainable development and environmental issues
are rarely addressed directly or dealt with particularly prominently
either in existing guidance or in that proposed by the recent
BRE Consultation. We recommend that RIA guidance places strong
emphasis on sustainable development issues, referring directly
to the current sustainable development strategy and key principles.
(Paragraph 70)
22. We encourage and
support the development of a single, consolidated RIA Toolkit,
as this would provide officials across government with an authoritative
and consistent resource for assessing impacts. It would also reduce
uncertainty and inconsistencies in the assessment of environmental
impacts. (Paragraph 72)
23. A more thorough,
rigorous and consistently enforced programme of review and scrutiny
would help to ensure not only that the content and scope of RIAs
was adequate, but also that minimum standards were met for the
quality of analysis and calculation. This would be particularly
important in the case of environmental impacts due to the frequently
poor coverage and assessment of such impacts, as demonstrated
in previous chapters. An improved review system could also help
to counteract the variations in presentation and clarity highlighted
by the NAO, thereby improving the transparency of the document.
We therefore believe that a demanding new review process would
be a key factor in developing, encouraging and reinforcing good
practice of all kinds. (Paragraph 75)
24. We propose a system
whereby all final RIAs are subject to review on the broad terms
of content, scope, quality of analysis, clarity and presentation.
We would expect training and guidance to provide officials with
the skills and resources required to meet these conditions. We
also recommend that the Government devise a procedure by which
a policy could be identified as having an excessive environmental
impact, triggering an examination and re-evaluation of the policy
idea with the objective of reducing this negative environmental
impact. In such circumstances we would like to see firm support
and advice provided to officials in order to bring the policy
in line with sustainable development principles and initiatives
before it proceeds to the next stage. We believe that this approach
will help to ensure that sustainable development and environmental
concerns receive adequate coverage and consideration in RIAs.
(Paragraph 76)
25. We support the
proposal for more substantial retrospective evaluation of the
accuracy and suitability of the figures and methods used to calculate
impacts. We believe that environmental impact assessment would
particularly benefit from such retrospective scrutiny, given the
uncertainty behind the techniques used to calculate environmental
costs and benefits. We would also call for such a review structure
retrospectively to evaluate the scope of impacts included in RIAs,
as this could identify frequently neglected environmental impacts
and ensure that they receive adequate attention in the future.
(Paragraph 78)
26. We were disappointed
to see that very little direct attention was paid in the BRE Consultation
to addressing the problems raised in the NAO's briefing on the
approach to sustainable development in RIAs. We would have thought
that, given the timing and the tight focus of the NAO's analysis,
the Consultation would have gone beyond acknowledging the problem
by proceeding to make recommendations which directly addressed
these issues. Sadly, other than general action intended to improve
the overall quality of RIAs, we could not see any recommendation
which directly tackled the problem of poor consideration of sustainable
development issues. Consideration of sustainable development on
the summary sheet has been limited to a yes/no response to the
question "does the policy comply with sustainable development
principles?". We consider this to be inappropriate and inadequate
(Paragraph 81)
27. We are concerned
that the steps taken in the Consultation document to decouple
certain parts of the assessment may have marginalised environmental
assessment and non-monetised analysis. All environmental and sustainable
development assessment, whether the analysis is monetised, quantified,
qualitative or descriptive, must be included in the main body
of the assessment. Any move to decouple any part of environmental
assessment represents a backward step and denies the increasing
urgency of the challenge posed by climate change and other environmental
issues. (Paragraph 85)
28. Technical changes
to the structure and guidance of Regulatory Impact Assessments
can only be truly effective if they are accompanied by commitment
and enthusiasm for implementing the principles of sustainable
development in all aspects of government. It remains to be seen
whether the lasting results of the BRE Consultation will produce
a new, fairer and more effective RIA system, as a crucial step
in establishing the principles of sustainable development throughout
government as a whole. (Paragraph 87)
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