National Health Service (Procurement, Patient Choice and Competition) Regulations 2013 - Secondary Legislation Scrutiny Committee Contents


Letter from Lord Goodlad to Simon Burns MP

The Committee is familiar with the Department's general policy intention in this sector having seen previous legislation relating to passenger services on trains, ships and planes. However I am writing to you because the Committee was unable to undertake proper scrutiny of this instrument because much of the required supporting documentation was not ready when the instrument was laid on 7 February:

  • Paragraph 8.4 of the Explanatory Memorandum (EM) states that the Government's formal response to the consultation would be available "shortly" — it was finally published on 20 February. However what was provided is simply a numeric analysis and does not aid the House, as it should, in validating whether the policy solution addresses the concerns expressed by respondents;
  • The Impact Assessment (IA) that was provided with the instrument is dated February 2012 and is from the consultation stage of the process. Paragraph 10.3 of the EM states that the final IA is currently with the Regulatory Policy Committee and will be published "in due course";
  • On page 10 of the interim IA provided it states that there could be a "medium negative impact" on the disabled and people with reduced mobility from applying the available exemptions but the Department had not discussed that with interested parties at the interim stage. Paragraph 8.2 of the EM states that the disadvantage to passengers will be mitigated by the requirements of existing domestic equality law. However without access to the analysis of consultation responses, all that the Committee has to rely on is the Department's unsupported assertion that that is the case.

The Committee's guidance on this has always been explicit: all documents that are relevant to the scrutiny of an instrument should be available when the instrument is laid. The Committee's Secretariat put these points to the Department on 8 February requesting the missing information and had received no formal response by the time the Committee's papers were circulated, a fortnight after the instrument was laid. The EU Regulation was agreed in February 2011 and the consultation exercise closed on 11 October 2012; there appears to be no obvious reason, other than poor management by the DfT, why the necessary material was not available for scrutiny.

The Committee also invites your comments on paragraph 10.1 of the original Explanatory Memorandum, which states that the benefit to employers is £8.2m, but which neglects to explain that the offsetting costs of £9.3m would result in a net deficit of £1.1m (if the figures in the interim IA are correct). At best this is careless; at worst it might be interpreted as misrepresentation of the data to Parliament.

Following our query to officials a revised EM was laid on 25 February but this only adds that there is a "net £1.1m disbenefit" that is "almost entirely a cost to Government of appointing enforcement bodies to enforce the entire Regulation". In the absence of a Final Impact Assessment we would have expected the Department to make rather more effort to set out clearly for the House what the costs and benefits for all affected parties are.

Because we lacked sufficient material to properly scrutinise the instrument, the Committee has drawn this matter to the special attention of the House in our 28th report of this session on the grounds that it may inappropriately implement EU legislation.

The Committee would be grateful for your explanation of this unacceptably poor practice and your assurances on the steps you will take to ensure that it does not recur.


27 FEBRUARY 2013

Letter from Norman Baker MP to Lord Goodlad

Thank you for your letter of 27 February to Simon Burns, about your scrutiny of Statutory Instrument (SI) 2013/228 on the Rights of Passengers in Bus and Coach Transport (Exemptions) Regulations 2013. I should explain that this matter falls within my portfolio and that Simon signed the SI in his capacity as Duty Minister.

I accept that there have been administrative failings and take your concerns very seriously. I can assure you that there was no intention to prevent proper scrutiny of this SI by your committee.

My initial timetable would have been to introduce secondary legislation to deal with all aspects of this Regulation at once. However, officials discovered only late in the day that an SI dealing specifically with exemptions needed to be made before the Regulation came into force. Regrettably, this meant that the associated documentation, including the final Impact Assessment was not complete at the time the SI was laid, although we provided a copy of consultation stage impact assessment and explained that the Government's response to the consultation would be published shortly. The final Impact Assessment has not yet been passed through all the processes associated with Cabinet committee clearance but in case it may be helpful to your committee, I attach a copy of the version for which clearance has been sought.

It may be helpful if I were to explain a little of the background to this Regulation. The Regulation is directly applicable and comes into force on 1 March 2013. There is provision in the Regulation for Member States to apply exemptions to certain parts of the Regulation for a period of 4 or 5 years (the 4 year periods are renewable once). SI 2013/228 places those exemptions that the Government is applying on a legislative footing. Government policy is normally to apply exemptions when implementing EU legislation wherever possible and my approach in this case is consistent with that policy.

We held a consultation exercise last year to seek opinion on the implementation of this Regulation. The consultation exercise not only asked about applying exemptions but other aspects of this Regulation such as enforcement, which are not dealt with in this SI. A further SI will be laid later in the year which will deal with these other aspects of the Regulation. The aim of the consultation was to ensure that respondents had a full opportunity to make us aware of any relevant considerations they wished to draw to our attention before we reached a final decision on how to apply the potential exemptions. As reflected in the summary of responses published on the website, we did not receive any representations that justified our departing from the general policy of applying exemptions. I consider the published summary to be an accurate assessment of the consultation responses and a clear indication of the Government's plan for giving effect to this Regulation.

The most substantial consultation response objecting to the use of exemptions came from the Royal National Institute of Blind People and related to the requirement that bus drivers receive mandatory disability awareness training. In response to their concerns, I have agreed to review disability awareness training in 12 months' time. Industry representatives tell me that approximately 75% of bus drivers have received disability awareness training and I expect that number to increase over the next 12 months and will be writing to the industry to that effect.

Turning to your specific questions, you ask about comments in paragraph 10.1 of the Explanatory Memorandum (EM) on costs and benefits. In response to your initial concerns about section 10.1 of the EM, the Department submitted a revised version which was intended to cover the points raised. On reflection, this may not have been detailed enough and the following paragraph provides further clarification.

The Impact Assessment used a baseline of the EU Regulation being fully in force. Against that baseline, option 2, the preferred option, sets out the costs and benefits of applying all of the exemptions. The cost over 10 years of applying all of the exemptions is £9.3m, approximately 90% of which is the cost to the Government of a national enforcement body. The remaining part of this cost reflects the inability of passengers to claim compensation in the event of delay or cancellation of a journey. The benefits of £8.2m are to bus and coach operators who will not have to comply with the Regulation in full. In fact, we believe that these monetised benefits may be underestimated and so the net disbenefit of this option could be lower than reported. In line with Government policy that all exemptions should be applied where there is a cost to business, option 2 is the preferred option and has been taken forward as it is the option which is least burdensome on business.

You also ask about page 10 of the consultation stage Impact Assessment. You will see from the final Impact Assessment that this section has been reworded and no longer refers to a 'medium negative impact on disabled and people with reduced mobility'.

I would like to reiterate that I fully understand the importance of the scrutiny process and apologise once again that fuller documentation was not available at the time the instrument was laid. I will ensure that when time comes to lay the second SI on this subject that the procedures are followed correctly. In the meantime, I am copying your letter and this reply to the DfT's Permanent Secretary, Philip Rutnam, for his information.

I hope this is helpful.

Yours sincerely


4 MARCH 2013

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