Select Committee on Environmental Audit Third Report


Consultation and Resources

59. It has become clear to us during the course of this inquiry that the production of an RIA is a far from simple undertaking. Officials are faced with a diverse range of impacts and considerable uncertainty over what to include and how it should be calculated. As a result, it is crucial to provide policy makers with the best possible resources, to enable them to produce RIAs of the highest standard possible. We consider the three most important areas offering assistance to policy makers to be consultation, training and guidance, described in more detail shortly. However, a number of other factors also have a bearing on the resources available to policy makers, and we urge the BRE to take account of the following areas:

  • Ensuring that specialist expertise already available within departments is located, publicised and made easily accessible to officials producing RIAs. The NAO review of RIAs called for departments to raise awareness of such expertise and to ensure that there is early input into impact assessments from these sources.[59]
  • Developing best practice through consultation with industry. There is no need for the BRE to develop its impact assessment strategy in isolation, when impact assessment is a process widely undertaken in business and evaluated by academic bodies. Merlin Hyman of the EIC stated to us that "expert consultants […] and academics are developing practice […] there is enough good practice out there for it to be done a lot better than it is at the moment".[60]

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.

  • The annual NAO review noted that the Better Regulation teams within departments are under increasing pressure due to the escalating numbers of RIAs[61] and pinched resources as a result of initiatives such as the Administrative Burdens Reduction initiative.[62] These teams "play a vital role in raising awareness of the need for impact assessment and assessing the quality of RIAs"[63] and are, as such, crucial to many of the areas identified within this report as in need of improvement, especially in supporting officials and promoting best practice.

As such, 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. We have already described how the RIA process has rapidly expanded far beyond its original highly specific origins, and the resources provided to the BR teams must reflect this step change.

Consultation

60. Consultation is an invaluable resource for officials carrying out RIAs. The NAO annual review of RIAs for 2005-06 sets out various benefits of consultation, such as gathering the views of stakeholders; opening up thinking to external challenge; helping to identify unforeseen problems and helping to increase the robustness of costs and benefits.[64] Consultation is of particular value when considering environmental impacts, as these can be difficult to identify and evaluate. Private companies, public bodies and other organisations can provide the expertise and experience required to ensure that environmental impacts are considered accurately, and that the impact assessment is grounded in practical realities rather than vague theoretical situations. In the words of Martin Silcock, Strategy Manager at Anglian Water, consultation is crucial for "realising that there are decisions which are made lower down the tree, if you like, that will impact the conventional outcomes" and ensuring these are taken into account during the impact assessment. [65]

61. The current guidance on consultation recommends a wide consultation process, beginning early and continuing throughout the process. The guidance also lists suggested consultees and provides advice on planning a consultation.[66] The NAO's annual review of RIAs for 2005-06 described the consultation process as a "consistent strength" of RIAs.[67] One approach with which the NAO was particularly impressed was that taken by the Immigration and Nationality Directorate at the Home Office which initiated a scheme to improve relations and build partnerships with key stakeholders.[68] Good and consistent relations of this type facilitate consultation and would be of benefit to officials carrying out RIAs.

62. However, this positive overview of the RIA consultation process was not shared by the Centre for Social and Economic Research on the Global Environment (CSERGE) at the University of East Anglia, whose studies revealed a number of interesting points:

  • "Consultation processes did involve the 'main players', though this was often principally industry rather than non-governmental organisations and the voluntary sector." […]
  • "Differences in stakeholder positions were more often than not unresolved by the RIA, with most comments made on the policy rather than on the RIA, reinforcing a perception that RIA is little more than a formulaic box-ticking exercise." […]
  • "In some of the cases we studied, consultation came so late in the policy development process, the process appears little more than an attempt to legitimise or communicate decisions."[69]

63. This indicates that there may be inconsistencies regarding the quality and breadth of consultation conducted. Also, given the neglect frequently experienced by environmental impacts in other parts of the RIA process, it would not be inconsistent to postulate that environmental impacts and relevant stakeholders may receive less attention than economic impacts and their concerned parties.

64. 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.

Training

65. It has become clear to us during the course of this inquiry that RIAs present considerable challenges to the officials preparing them. Effective training is therefore crucial if an accurate and comprehensive RIA is to be produced. Training is especially important in the case of environmental impacts, given the 'difficult' nature of the field. Decent training will provide officials with both the awareness to cover environmental concerns and the knowledge accurately to assess them, without becoming disheartened by the challenge.

66. Evidence from the NAO leads us to believe that the current system of training is inadequate. Discussing RIAs in general, the NAO annual review of RIAs for 2005-06 stated that:

"All departments provide some form of training on better regulation although the focus and content varied wildly. […] The lack of a consolidated course has […] made it more difficult to disseminate information about BRE initiatives […] The provision of training is not coordinated between departments and there appears to be much 're-inventing of the wheel'. The Better Regulation Executive offers a training programme but only provides this when asked to do so."[70]

If the outlook for general RIA training is bleak, the provision of training specifically targeting sustainable development in RIAs is even less promising. The NAO briefing document on sustainable development in RIAs notes that Better Regulation Units within departments are not currently offered training on sustainable development by the Better Regulation Executive.[71] The briefing also states that "the majority of departmental BRUs told us that a lack of resources, such as staff or training, restricts their ability to ensure RIAs fully consider sustainable development."[72]

67. 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.

Guidance

68. The main tool assisting officials to complete RIAs effectively is the guidance produced by the BRE and available online.[73] We believe that the current RIA guidance needs to be improved upon, firstly in order to correct the "general lack of consistency in the analysis undertaken and the presentation of results" as remarked upon by the NAO in their annual review of RIAs for 2005-06,[74] and secondly to improve the approach to environmental concerns and sustainable development. The NAO's briefing for us found that "more than half (nine out of 16) of BRUs we consulted agreed that the BRE Guidance 'is of a reasonable quality but its usefulness in assessing these [sustainable development] costs and benefits is limited'."[75]

69. Guidance represents a valuable channel for ensuring best practice and changes in the RIA process are cascaded down to officials at the moment of compiling an RIA. It is also the most valuable tool for successfully reinforcing the consideration of environmental impacts in RIAs. A requirement to include such impacts is worthless if officials do not possess the skills and support adequately to identify and assess environmental concerns. Unless guidance devotes considerable attention to these areas any requirement risks being greeted as a 'tick-box' exercise whereby analysis is carried out as a formality, rather than in a considered and thoughtful manner. Guidance on this topic should acknowledge the difficulties faced by policy-makers and facilitate this task as far as is possible. It should also make clear to officials the standards they are expected to reach in terms of scope, analysis and presentation, and should provide the information and support necessary to ensure these standards are reached.

70. 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. In such a way the guidance should promote and reinforce understanding amongst officials that a policy or regulation should seek to achieve benefits across all sectors; economic, social and environmental, and that these three areas should be viewed in an integrated manner rather than as distinct, opposed domains.

71. The analysis and quantification of environmental impacts is one area where clear, consistent guidance is considerably lacking. Current guidance provides some general indications of how this should be achieved, and also links to the relevant section in the Treasury Green Book,[76] but there is no consolidated, RIA-specific resource covering this difficult area. Given the difficulties faced by officials when assessing environmental impacts we are concerned that this rather diffuse approach creates confusion and uncertainty, and we believe a firmer guiding hand is required.

72. The BRE consultation document proposed an RIA Toolkit, which was intended to provide "detailed guidance on more technical issues—for example information on how to establish competition effects—which is likely to be of particular interest to economists and other analysts working as part of the policy team."[77] Given that this Toolkit was still being developed, it was unfortunately not available to view with the consultation document. 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. However, there are several factors which we hope to see included in the Toolkit:

  • In addition to assistance on the quantification and monetisation of impacts, the Toolkit should also advise officials on methods for assessing impacts through qualitative analysis and descriptions, as well as the preferred presentation and format for this. The Toolkit should acknowledge and promote the need for different forms of analysis, and help officials to decide what form(s) of assessment would be suitable for each impact. This should help to ensure that environmental impacts are dealt with in the appropriate manner.
  • The figures and methods agreed in the Toolkit should be applied cross-departmentally to ensure consistency and prevent officials from selecting the techniques which may suit their particular agenda. In its memorandum the Sustainable Development Commission called for DEFRA and the BRE to work together on the RIA guidance and Toolkit, and for all departments to "sign up to agreed valuations, methodologies and discount rates".[78] We support this recommendation, as we believe that greater consistency across departments would improve the standard of environmental assessment and would overall increase the profile of environmental concerns in RIAs. This would also aid officials by presenting them with a clear strategy for evaluating environmental impacts.
  • We believe that the Toolkit should provide thorough worked examples, in order to clearly demonstrate to officials how particularly difficult areas of assessment should be tackled.
  • Given the constant research into assessment, we would like to see the Toolkit evaluated and updated regularly, taking into account new developments in the field of impact assessment and identifying appropriate new assessment models.

73. More generally, there are several key recommendations we have made earlier in this report, regarding RIA guidance, which it is appropriate to reiterate here:

  • Guidance should communicate to policy-makers the benefits of a thriving environmental industries and services sector, and ensure that this factor receives adequate consideration.
  • Guidance should promote the consistent presentation of RIAs within a single template, in order to maintain a clear structure and improve the accessibility of RIAs.
  • Guidance should emphasise the importance of extending the consultation process to consult equally on environmental impacts and with those parties particularly involved in and affected by the environmental consequences of the implementation of the policy.
  • Guidance should reiterate to officials a requirement of including a "do-nothing" option, and provide the information necessary for this part of the assessment to be understood and adequately completed.
  • Guidance should also reiterate a requirement to include a "null response" for environmental impacts, if there are deemed to be no such consequences of the policy. This is crucial in order to demonstrate that environmental impacts have been considered.
  • Guidance should underline the importance of considering the full range of environmental impacts, advising officials that carbon, whilst remaining a crucial issue, is only one aspect of a wide spectrum of environmental concerns.




59   National Audit Office, Evaluation of Regulatory Impact Assessments 2005-06, HC 1305 of session 2005-2006 page 7. Back

60   Q 14 Back

61   National Audit Office, Evaluation of Regulatory Impact Assessments 2005-06, HC 1305 of session 2005-2006 paragraph 2 notes that around 200 'Final' RIAs were produced by Government departments last year. As an example of the escalating numbers of RIAs, the Home Office produced eight final RIAs in 2001, but 60 in 2005 (Ibid. paragraph 3.9) Back

62   Ibid. paragraph 3.6 demonstrates the pressures of expectations and funding facing departments, and the choices that must be made: "The resourcing of central teams is a matter of departmental priority and there is no straightforward measure of the appropriate level of resources. The size of teams reflects the level of involvement in regulatory issues, the workload and nature of the department. Departments were not given additional funding to respond to the increased pressures created by the Administrative Burdens work and it has been up to departments to allocate what they consider to be appropriate in this area.". Back

63   Ibid. paragraph 3.9 Back

64   Ibid. paragraph 2.8 Back

65   Q 61 [Mr Silcock] Back

66   Better Regulation Executive Guidance for Officials - Consultation http://www.cabinetoffice.gov.uk/regulation/ria/ria_guidance/consultation.asp  Back

67   National Audit Office, Evaluation of Regulatory Impact Assessments 2005-06, HC 1305 of session 2005-2006 paragraph 2.9 Back

68   Ibid. paragraph 2.11 Back

69   Ev 40 Back

70   National Audit Office, Evaluation of Regulatory Impact Assessments 2005-06, HC 1305 of session 2005-2006 paragraphs 3.14-3.17 Back

71   National Audit Office, Regulatory Impact Assessments and Sustainable Development - Briefing for the Environmental Audit Committee, May 2006, paragraph 1.38 Back

72   Ibid. paragraph 1.37 Back

73   The main menu for this guidance can be found on the web pages of the Better Regulation Executive at: http://www.cabinetoffice.gov.uk/regulation/ria/ria_guidance/index.asp  Back

74   National Audit Office, Evaluation of Regulatory Impact Assessments 2005-06, HC 1305 of session 2005-2006 paragraph 11 Back

75   National Audit Office, Regulatory Impact Assessments and Sustainable Development - Briefing for the Environmental Audit Committee, May 2006, paragraph 1.26 Back

76   This section can be found at http://greenbook.treasury.gov.uk/annex02.htm#valuing  Back

77   Better Regulation Executive, The Tools to Deliver Better Regulation - A Consultation Document, p14 Back

78   Ev 55 Back


 
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