Documents considered by the Committee on 8th December 2010 - European Scrutiny Committee Contents

12 Impact assessments and EU decision-making



Special Report No 3/2010 by the European Court of Auditors: Impact assessments in the EU institutions — do they support decision-making?

Legal base
Deposited in Parliament5 November 2010
DepartmentBusiness, Innovation and Skills
Basis of considerationEM of 23 November 2010
Previous Committee ReportNone, but see footnote
To be discussed in CouncilSee paragraph 12.12 below
Committee's assessmentPolitically important
Committee's decisionCleared


12.1 As we noted recently, the production of impact assessments by the Commission when putting forward legislative proposals is one of the cornerstones of the Better Regulation[59] policy, and, in this Special Report, the European Court of Auditors has analysed how far such assessments have supported decision-making by the EU institutions.

The current document

12.2 The Court says that the report covers the period 2003-08, and involved an international comparison of impact assessment systems, an analysis of a sample of Commission impact assessments, and interviews with those preparing and using them, with the findings being examined against the relevant inter-institutional agreements, the Commission's own guidelines, and general good practice. In particular, it examines the extent to which:

  • impact assessments were prepared by the Commission when formulating its proposals, and subsequently consulted by the Council and European Parliament during the legislative process;
  • the Commission's procedures for impact assessment appropriately supported its development of initiatives;
  • the content of impact assessment reports was appropriate, and their presentation conducive to their being taken into account in decision-making.

12.3 The Court observes that impact assessments are intended to identify and assess the problems being addressed and the objectives pursued; to develop the main options for achieving those objectives, and analyse their likely economic, environmental and social impacts, together with potential administrative burdens; to assess possible implementation and enforcement problems; and to specify monitoring and evaluation arrangements. It notes that all major policy initiatives — defined, with some clearly identified exceptions,[60] as those presented in the Annual Policy Strategy or in the Commission's Legislative Work Programme — are now subject to an impact assessment, as are other significant initiatives on a case by case basis: and the system also applies to revisions to existing EU legislation and (since 2009) to implementing rules adopted under comitology procedures. It also points out that inter-institutional agreements between the European Parliament, Council and Commission have agreed that impact assessments make a positive contribution to improving the quality of EU legislation, and that both the Parliament and Council have committed themselves to using them during the negotiating process.

Use of impact assessment for decision-making

12.4 The Court notes that, during the period audited, impact assessments were increasingly used in the development of Commission policy initiatives and legislative proposals, the numbers rising from 21 in 2003 to 121 in 2008, with the main condition for selection being inclusion in the Commission's Legislative Work Programme (though it adds that assessments have increasingly been carried out on other initiatives as well). It says that they are becoming part of the Commission's policy developing culture, and it notes that since 2007 their quality has been reviewed by an Impact Assessment Board — though it observes that they are used in order to support the policy development process, rather than to decide whether to pursue a proposal.

12.5 The Court says that all impact assessments accompanying legislative proposals are forwarded to both the Council and European Parliament, but it suggests that in practice they are not systematically presented at committee or working group meetings, and that explicit references to them in reports are rare. Nevertheless, it records that users at both institutions see them as providing relevant information, and as contributing to the quality of the measure adopted: likewise, they are also taken into account by other interest groups, although some regard them as policy justifications for the Commission's proposals rather than independent assessments of their possible impacts.

12.6 The Court goes on to note that almost all Commission proposals are modified — sometimes quite extensively — during consideration by the Council and European Parliament, but that very few of the amendments made then have been subjected to an impact assessment by either body, and nor has the Commission itself produced updated assessments. It also comments that the UK is the only Member State to carry out its own impact assessments in order to build its negotiating position in the Council.

Commission procedures for preparing impact assessments

12.7 The Court notes that, although the Commission states that assessments should be targeted at initiatives having the most significant impacts or which are politically sensitive, decisions are taken on a case-by-case basis, and that there are no quantified indicators to establish thresholds above which an assessment should be carried out: nor are the reasons for selecting a particular initiative outside the Commission's Legislative Work Programme made public. The Court also comments that, although the Commission consults widely in drawing up its impact assessments, it does not invite comments on draft reports. On the other hand, it draws attention to the recent improvements in the way in which the Commission reviews the quality of its assessments, including the contribution of the Impact Assessment Board (which in 2008 requested the resubmission of 43 out of the 135 cases it examined). It also notes that, although the Board does not have a mandate to require Directorates General to initiate an assessment for a particular proposal, a number of additional assessments have been carried out as a result of its advice.

Content and presentation of impact assessments

12.8 The Court says that its analysis showed that impact assessments provided an adequate overview of the problem being addressed and a set of reasonable policy objectives, and that Member States and other stakeholders felt that this helped them to understand the Commission's reasons for initiating a proposal. However, it adds that assessments did not always make it clear how the intended mechanism would deliver the policy objective, and it comments that the aim of analysing all significant economic, social and environmental impacts is ambitious compared with the approach followed internationally. The Court also comments on the different weight given to these three areas, and the difficulty in comparing alternative options as a result of the different weight sometimes given to the depth of analysis of different options, and insufficient or inadequate quantitative data — a problem it says is compounded by differences in the availability and reliability of data provided by Member States. The Court highlights the needs for assessments to take greater account of implementation and enforcement costs, whilst recognising the difficulty arising from the existence of 27 different national legal systems and the absence of national impact assessments: and it also stresses the need for the systematic ex-post evaluation of existing policies and programmes, not least in relation to the need for the Commission to propose revisions.

12.9 The Court concludes by making a number of recommendations:

  • as regards the impact assessment process, it says that the Commission should provide an overview of all legislative initiatives for which it intends to undertake an assessment (with a reasoned justification when one is not performed), that it should publish interim documents (such a draft assessments), and ensure that quality reviews by the Impact Assessment Board take place on a timely basis;
  • as regards the content and presentation of reports, it says that the Commission should facilitate a comparison of options by improving their quantification of costs and benefits, seek to improve the quality of the available data, put more emphasis on implementation and ex-post evaluations, and analyse enforcement costs in more detail.

The Government's view

12.10 In his Explanatory Memorandum of 23 November 2010, the Minister of State for Business and Enterprise at the Department for Business, Innovation and Skills (Mr Mark Prisk) says the Government warmly welcomes this report, which it believes provides a useful analysis of the Commission's progress in introducing impact assessments, and the improvements which have been made since they were first introduced. It also strongly agrees with a number of points raised by the Court and its recommendations, especially the need for all the EU institutions to have a joint responsibility for the delivery of evidence-based legislation, and the suggestion that the Commission should publish draft impact assessments for comment before it finalises policy decisions. He describes the latter as one of the UK's key priorities in its response to the Commission's consultation on smart regulation, but says that it was not reflected in new strategy for that area.

12.11 The Minister says that the Government was nevertheless pleased to see that the recent Commission Communication on smart regulation contained a commitment to improving its impact assessment system, including the intention to carry out ex-post reviews of existing legislation; to improve the quality and availability of data used; and to give the Impact Assessment Board more power to challenge proposals made by Commission departments. However, the Government believes that there is still considerable need for improvement, and that some of the recommendations in the report do not go far enough, with some key elements appearing to have escaped discussion altogether. In particular, the Minister notes that the UK's response to the Commission's smart regulation consultation urged it to improve the scrutiny and quality of regulation to small businesses, and he is disappointed that there is no analysis in this report about how the SME Test is used within the Commission. He also believes that, although the Impact Assessment Board has been an important innovation, its operation could be strengthened further, for example by engaging the advice of external experts, ensuring the consistent application of the SME Test, and pushing for alternatives to regulation to be considered wherever feasible.

12.12 The Minister says that the report has been considered in Brussels by officials, and is likely to be noted, without substantive discussion, at the Competitiveness Council on 10 December 2010.


12.13 We have recently noted (and welcomed) the increasing use of impact assessments as part of the EU decision-making process, and this report by the European Court of Auditors is thus topical and timely. We are therefore drawing it to the attention of the House, but, as it does not appear to raise any issues requiring further consideration, we are clearing it.

59   (32067) 14421/10: see HC 428-ix (2010-11), chapter 11 (24 November 2010). Back

60   Such as Green Papers, periodic decisions, reports and proposals arising from international obligations. Back

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