Impact Assessments in the EU: room for improvement? - European Union Committee Contents


Memorandum by the Department for Business, Innovation and Skills

INTRODUCTION

  1.  There has been significant progress made on the EU's better regulation agenda over the past ten years and we would commend, in particular, the critical role played by the Commission in driving the agenda forward.

  2.  The commitment of President Barroso, Commissioner Verheugen and Commission staff to better regulation has been central to the on-going effectiveness of the agenda. The Commission has lead many of the key developments in better regulation and with the cooperation of the European Parliament and the Council, has been able to establish a stronger framework of better regulation.

  3.  However, there remains much that needs to be done to ensure the effective delivery of the agenda. All three institutions must reaffirm their commitment to better regulation, set ambitious objectives for the future and place better regulation at the heart of our response to the economic crisis and other pressing challenges faced by the EU.

DEVELOPMENT OF BETTER REGULATION IN THE EU

  4.  The EU's better regulation agenda has undergone a number of significant developments during the past ten years, with programmes covering administrative burden reduction, impact assessment and simplification of Community legislation.

  5.  Guidelines on consultation were introduced in 2002 and require all Directorates General to carry out inclusive, transparent, coherent and timely consultations.

  6.  In 2003 the Inter-Institutional Agreement was agreed by the Commission, Council and the European Parliament with the aim of establishing a shared strategy for better law-making throughout the legislative process.

  7.  The Commission also established a comprehensive Impact Assessment system in 2003, intended to assess the economic, social and environmental impacts of legislative and non-legislative proposals.

  8.  In 2005 the Commission began its simplification programme designed to update, modernise and simplify the body of Community legislation (the "acquis").

  9.  The Impact Assessment Board was established in 2006 with responsibility for improving the quality of Commission Impact Assessments.

  10.  In 2007 the Commission began its programme to reduce administrative burdens by 25 per cent by 2012. President Barroso set up the High Level Group of Independent Stakeholders on Administrative Burdens—known as the Stoiber Group—to support this process.

  11.  By adopting the Small Business Act for Europe in 2008 the EU committed the Commission to implement the "think small first" principle as part of its wider policy development that seeks to ensure that unnecessary burdens are not imposed on small and medium sized enterprises.

  12.  Finally, new impact assessment guidelines were introduced in 2009, which made more stringent the requirements relating to impact assessments.

  13.  These developments have established a framework for better regulation in the EU, but more needs to be done to ensure the effective delivery of the agenda.

SCOPE OF THE IMPACT ASSESSMENT PROCEDURES

  14.  The UK was at the forefront of efforts to extend the scope of the Commission's impact assessment procedures and ensure that the right proposals are chosen to be subject to an impact assessment.

  15.  The new Commission guidelines extended the scope of the impact assessment procedures to all legislative proposals included in the Commission's Legislative Work Programme (CLWP), non-CLWP proposals that have clear economic, social or environmental impacts, non-legislative initiatives (such as white papers) that define future policy and comitology measures that are likely to have significant impacts.

  16.  The Government welcomes the Commission's decision to extend the scope of its impact assessments procedures and believes that this allows for a better selection of proposals to be subject to an impact assessment.

  17.  However, the Government would like the Commission to ensure that all Directorates-General comply with the provisions in the impact assessment guidelines and note that there have been occasional examples where an impact assessment has not accompanied a significant proposal.

  18.  The Government also believes that the Council and the European Parliament should play a greater role in holding the Commission to account when it fails to comply with its guidelines and produce an impact assessment of sufficient quality.

DEVELOPMENT OF IMPACT ASSESSMENTS

  19.  The Government believes that the development of impact assessments should be a continuous process designed to help policy-makers fully think through the consequences of regulatory interventions. As such, we believe that impact assessments should be produced as early as possible and updated throughout the policy development and legislative processes.

  20.  We believe that all Directorates-General should begin developing impact assessments as soon as a policy is being considered and that over time indicative monetised assessments of social, environmental and economic impacts should be included alongside policy commitments made in the Commission's Annual Work Programme to give decision-makers an overview of the impact of legislation being proposed for an entire year.

  21.  More must also be done to ensure that substantial amendments introduced in the Council and the European Parliament are accompanied by an impact assessment.

  22.  Both institutions have committed to assessing the impact of their substantial amendments[1], however this is not happening consistently in the Parliament, and not at all in the Council. We believe that, in the event of the Inter-Institutional Agreement on Better Law Making being renegotiated in 2010, this matter should receive urgent attention.

USE OF IMPACT ASSESSMENTS IN THE COUNCIL AND EUROPEAN PARLIAMENT

  23.  In the Common Approach to Impact Assessment (2005) both the Council and the European Parliament committed to examine the Commission's impact assessment alongside policy proposals. However, there is limited evidence of this commitment being applied in practice.

  24.  In Council working groups and committees of the European Parliament, debates regarding impact assessments remain the exception rather than the rule. The Government is working closely with other member states, including the Presidencies, and MEPs to address this.

  25.  We have provided training to working group chairs under both the Czech and Swedish presidencies, so as to bring about full awareness and understanding of the importance of impact assessments and the need for these to be discussed during working groups.

  26.  We welcome the approach taken by some committee chairs in the European Parliament, who have insisted that all debates include a discussion of the Commission impact assessment. We would strongly encourage all committee chairs to follow this example.

  27.  We also believe that the introduction of a 1-page summary sheet would make impact assessments more accessible and encourage a focused debate on the key aspects of the Commission's analysis, whilst also providing greater clarity for national parliaments if these were to be attached to Explanatory Memoranda. The Government continues to press for the introduction of summary sheets.

INFLUENCE OF IMPACT ASSESSMENTS

  28.  The extent to which Commission impact assessments influence policy development is unclear. However, some stakeholders have expressed concern that impact assessments do not adequately influence the thinking of policy makers, but are used to justify policy decisions that have already been made.

  29.  The Commission's use of consultants to carry out impact assessment studies brings risks, as it separates the development of an impact assessment from the development of the associated policy proposal. The Government believes that more should be done to ensure that the two processes (IA and policy development) are brought closer together so that all Commission impact assessments influence policy development.

  30.  With regards to the inclusions of the "do-nothing" option in impact assessments, this is now required by the impact assessment guidelines and as of 2007 only 16 per cent[2] of impact assessments did not include the do-nothing option in their analyses. However, there is little evidence that inclusion of the do-nothing option leads to its selection as the preferred policy option.

CONSULTATION ON IMPACT ASSESSMENTS

  31.  While the Impact Assessment Guidelines advise that Directorates-General reserve time for public consultation and the collection of expert information, it is rare that stakeholders are offered the opportunity to comment on a draft impact assessment. We believe that there is scope for greater stakeholder engagement with the development of impact assessments, particularly by allowing the opportunity to comment upon draft versions.

  32.  This could also assist the Commission in gathering the data required to effectively assess the impact of proposals on small and medium sized enterprises (SMEs).

  33. The UK welcomed the introduction of the Small Business Act for Europe and the EU's commitment to "think small first". It is now essential that the Commission implements and embeds an effective test for the impact of proposals on SMEs so as to demonstrate it's commitment to the "think small first" principle.

THE IMPACT ASSESSMENT BOARD

  34.  The Government welcomes the role of the Impact Assessment Board (IAB) in scrutinising Commission impact assessments and while there are calls for it to become fully independent, we do believe that it works in its current position.

  35.  However, there is much that can still be done to increase the influence of the IAB and its ability to raise the quality of impact assessments, particularly in the area of quantifying costs and benefits across all three pillars.

  36.  We believe that the IAB should comment on impact assessments earlier in their development so as to maximise their ability to influence the quality of an impact assessment.

  37.  We also believe that more should be done to maintain the prominent position currently enjoyed by the IAB. The success of the IAB has, to a large extent, been the result of the quality of its board members. The Commission should ensure that the IAB is always populated by officials with sufficient seniority and influence to ensure that it is not sidelined or its independence undermined.

  38.  The IAB's influence could be strengthened with two measures. First, a couple of non-executives could be added to its members, to reinforce its independence. Second, when it is unhappy with the quality of an impact assessment, even after revision, this should trigger an oral procedure with the College of Commissioners.

COMMISSION SUPPORT DURING IMPLEMENTATION

  39.  The Commission does provide support for Member States during implementation. For example, the Commission has provided ongoing support to Member States during the implementation of the Services Directive.

  40.  In particular, the Commission has facilitated a series of meetings between Member States which have been valuable in ensuring a shared understanding of the Services Directive.

  41.  The Commission has also been quick to respond to any questions regarding interpretation or implementation of the directive.

  42.  We believe that the Commission should, as far as is possible, support Member States so as to ensure timely and effective implementation.

CONCLUSION

  43.  The development of the better regulation agenda at the EU level has been impressive. However, there remains much that needs to be done to ensure the agenda's on going success.

  44.  All three institutions must re-emphasis their commitment to better regulation and in particular, prioritise the effective use of impact assessments during policy making and decision taking.

  45.  The Council and the European Parliament must meet their commitment to produce impact assessments on substantial amendments and more should be done to ensure that committees in the European Parliament and Council working groups discuss Commission impact assessments.

  46.  Finally, the Commission must ensure that the quality of its impact assessments continues to improve, particularly in the area of quantifying costs and benefits across all three pillars, and using impact assessments to shape proposals.

23 September 2009



1   Inter-Institutional Common Approach to Impact Assessment (2005), http://ec.europa.eu/governance/better_regulation/documents/ii_common_approach_to_ia_en.pdf Back

2   http://ec.europa.eu/governance/impact/key_docs/key_docs_en.htm Back


 
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