CHAPTER 14: FINANCIAL IMPLICATIONS
392. The Government have set out their schedule
of the estimated costs of the proposals in the draft Regulatory
Impact Assessment (RIA). An effective RIA should provide a comprehensive
cost-benefit analysis of a policy proposal in order to facilitate
assessment of the overall merits of the proposal. Detailed guidance
is provided by the Cabinet Office.[450]
393. Definitive cost estimates were not provided
in the RIA for some of the measures contained in the draft bill,
in particular in respect of extending duties on local authorities
and introducing a duty on private clubs to make reasonable adjustments.
The Government told the Committee that they were planning to carry
out further consultation on "our proposals for draft Regulations
using the powers laid down in the clauses concerning public authority
duties and private clubs".[451]
Although this is a draft bill, it is important for the cost estimates
to be robust and comprehensive in order to facilitate a proper
assessment of the proposals. This is the purpose of producing
a Regulatory Impact Assessment. An assessment should not therefore
be left entirely until the detail of the secondary legislation
is available. Therefore the Committee recommends that, not
only should the Department review the RIA in order to improve
it for the full bill, but that when producing future draft bills
more attention is devoted to ensuring that the initial cost and
benefit estimates are comprehensive.
394. The Government have not complied with guidance
on RIAs that a monetary value should be placed on all impacts,
even if they are seemingly unquantifiable or non-financial in
nature.[452] The Committee
is convinced that the benefits of the proposals in this bill outweigh
the quantifiable costs. However, we are disappointed that the
Department did not comply with Cabinet Office guidance. The
Committee recommends that the Department reviews the processes
it uses for preparation of RIAs, and seeks to ensure that they
are designed to present a more robust and measurable assessment
of the balance of costs and benefits in any regulatory proposals.
395. Both the LGA and the Welsh LGA expressed
concerns about the cost impact on local authorities of the proposals.
The LGA's experience with the introduction of the race equality
duty suggests that costs in human resources terms (including training)
can be substantial for many authorities, and it is concerned that
the Government have not estimated these costs.[453]
The LGA estimated that the additional training costs which would
fall to councils as a result of the new duty to promote disability
equality would be £10,000 to £20,000 per authority,
approximately £5.5 million in total across England and Wales.
There would also be additional human resource costs.[454]
The Welsh LGA sought a general recognition from the Government
of the resource implications of the proposals.[455]
As noted above the Government have not yet provided a definitive
estimate in the RIA of the total costs to local authorities of
the new duty to promote equality or of extending the scope of
the DDA to the functions of public bodies. In addition, the LGA
also considered that the Government have underestimated the costs
of extending the DDA to councillors.[456]
396. The Committee is concerned that the Government
did not examine in more detail the costs of the new duties for
local authorities, especially given that they could be significant
for individual authorities. Local authorities will have to consider
carefully their priorities to address these additional duties.
There will also be cost implications for other public bodies.
The Committee recommends that the Government and other relevant
bodies provide appropriate support for public authorities to share
good practice and deliver the new duties cost effectively.
397. The Government recognise that additional
work will fall to the DRC as a result of the proposals in the
bill, particularly when it comes to producing new codes of practice[457]
and, as the DRC noted, when it comes to enforcement of the new
measures.[458] The
DRC estimates that it will need a budget of £22 million in
2007-08 compared to £14.7 million in 2003-04, as well as
extra staff.[459] The
Committee notes that the effectiveness of the measures in the
bill depends in large part on the DRC producing sound guidance
and then effectively monitoring and enforcing the DDA. The Committee
therefore trusts that the Government recognise this and are committed
to making available the additional funds to the DRC to carry out
these duties effectively.
398. The Committee recognises that a number of
our recommendations have resource implications which have not,
of course, been costed in the draft RIA. The full RIA should
therefore assess the costs and benefits of those of our recommendations
which are included in the full bill. However, our own analysis
suggests that there are only a few areas where significant costs
may arise from our proposals. Our proposals relating to the coverage
of progressive conditions and mental illnesses are aimed primarily
at correcting unexpected interpretations of the legislation and
ensuring that those originally intended to be protected are actually
covered, and should not therefore cause significant additional
costs. Our recommendations relating to public authorities are
intended to create greater consistency with other parts of the
DDA and other anti-discrimination legislation, and should not
therefore impose significant additional burdens on local authorities
beyond what is already proposed.
399. Creating an enabling power to cover volunteers
(paragraph 359) may cause significant additional costs (and benefits).
We propose further consultation on this subject after a voluntary
code is evaluated, and as part of this consultation would expect
an assessment of the overall costs and benefits to be made. Adding
guests to the provisions of clause 7 (paragraph 291) may also
cause some additional costs. The RIA requires further work in
assessing the costs of the private clubs proposals generally,
and if our recommendation concerning guests is accepted it should
be included in this revision. It is, however, difficult to see
why there should be any significant costs over and above those
to be incurred by clubs when they are required by regulations
to make reasonable adjustments for members.
450 Better Policy Making: A Guide to Regulatory Impact
Assessment, Cabinet Office Back
451
Ev 249, A1 Back
452
Better Policy Making: A Guide to Regulatory Impact Assessment,
Cabinet Office, para 4.3 Back
453
Ev 112, para 4.3 Back
454
Ev 112, para 4.3 Back
455
Ev 292 Back
456
Ev 112, para 4.4 Back
457
Draft RIA, para 11.1 Back
458
Q 57 Back
459
QQ 57-8 Back
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