Slide number 1

Better Regulation Executive

What can and should be measured?

Improving measures of policy burdens through better Impact Assessment

Making regulation work for everyone

Slide number 2

Simplification Plans

• Seek to remove unnecessary costs of regulation• Cover admin, policy and public sector savings • Policy savings account for around 20% of total

savings identified by 2010

2005/06 2006/07 2007/08 2008/09 2009/10Admin Burden 0.3 0.7 1.8 2.2 3.0Policy Burden 0.1 0.2 0.6 0.7 1.3Public Sector 0.0 0.9 1.3 1.3 2.4

€bnAnnual Savings

Slide number 3

Policy burdens calculated through RIAs

• Separating ‘one off’ from recurring admin and policy burdens helps focus on cost minimisation

• Benefits of RIA format:• Established brand, high level of compliance,

integrated into consultation, used to ensure accountability

• Current weaknesses:• Rigour, embeddedness, data quality, transparency

Slide number 4

Improving Impact Analysis

• Revised template – key information summary pages

• Analytical sign off

• Shorter guidance supported by a tool kit

Slide number 5

But….

• Regulation is heterogenous and aggregate measures challenging to interpret – can be misleading

• Some potential for standardisation in Impact Assessment calculations e.g. value of life, cost of carbon, discount rates, optimism bias…

• Limited evidence on the link between regulation and productivity, competitiveness

• Must not overlook the benefits derived from regulation when instituting change

Slide number 6

Additional Information

• DTI/BRE Conference: Evaluation of Regulation

‘Adding up the costs and benefits’

www.dti.gov.uk/about/economics-statistics/economics-directorate/page35674.html

Slide number 7

Business Costs to include in IA

Business Costs NOT to include in IA

Economic Costs for Business From Regulation

Broad Compliance Costs

Financial costs(often transfers)

KEY

Route to Use of SCM for admin burdens baseline purposes

Recurring Substantive Compliance

(Policy) Costs

One Off Transition Costs

(Admin and/or Policy)

Recurring Admin Costs

*Use Standard Cost Model*

Admin BurdensBusiness As Usual

Costs