Peers say system of impact assessments for Government legislation is “failing Parliament and the public”

The House of Lords Secondary Legislation Scrutiny Committee has said that parliamentary scrutiny is being limited due to the poor implementation of Impact Assessments (IAs) of Government legislation.

In its report, 'Losing Impact: why the Government's impact assessment system is failing Parliament and the public', the committee made a number of recommendations, including a call for all IAs to be laid before Parliament at the same time as the instrument in order to ensure effective Parliamentary scrutiny, transparency and accountability.

The committee said that standards had been repeatedly endorsed during debates in the House of Parliament that say an IA should be published on the same day that a significant instrument is laid before Parliament.

The Regulatory Policy Committee (RPC), which is an independent body, should then judge whether the IA is fit for purpose.

In 2017, the committee noticed an improvement in the provision of impact information for legislation. However, the "exceptional volume" of statutory instruments (SIs) caused by Brexit and then the pandemic undermined that progress, the committee noted in its report published yesterday (10 October). 

According to the report, Government departments have failed to provide IAs for a number of significant SIs covering a range of policy areas.

"Our concern is that the number of qualifying instruments which have not followed the IA procedure has increased and, given that no sanctions appear to be applied where a department fails to comply, there would seem to be little incentive for departments to improve", the committee said.

The report also highlighted instances in which IAs were published months after the instrument came into effect.

The committee said the late laying of IAs raises concerns over parliamentary scrutiny, the opportunity for wider challenge, and policy development.

Alongside the poor implementation of IAs, the committee found the Government is also failing to carry out Post-Implementation Reviews (PIRs) at high rates. A PIR is a checking process to see if the policy has achieved its intended outcome.

The committee estimated that for only 25–40% of instruments were PIRs completed despite it often being a statutory obligation.

Eleven recommendations were made by the committee. These included:

• Parliament should consider deferring approval of an instrument if the IA is not available before the debate.
• The IA procedure should apply to significant public sector projects as well as those that affect business and the voluntary sector.
• All supporting information, including IAs, must be laid before Parliament at the same time as the instrument in order to ensure effective Parliamentary scrutiny, transparency and accountability, the committee recommended.
• IAs should be published alongside all instruments which implement significant policy changes irrespective of the sector impacted.
• Departments should ensure that they plan realistically, including time to address any problems identified by the RPC, and only ask for expedited consideration in exceptional circumstances.
• For instruments below the threshold of £5 million per annum, departments should always include basic impact information in the Explanatory Memorandum (EM) and attach the de minimis assessment where available.
• When the Government are reviewing their handling of the pandemic legislation, the committee recommended that they consider whether these IA exemptions prevented useful information from being gathered that could have made subsequent measures more proportionate and better targeted.

Commenting on the significance of IAs, Lord Hodgson of Astley Abbotts, Chair of the Secondary Legislation Scrutiny Committee said: “When done correctly, an IA is a document that should set out clearly the purpose and justification for an instrument as well as the alternative ways the policy could be achieved.

“The IA should not just be an item on a ‘to-do list’ but an integral part of the policy formulation process. As such, IA’s play a critical role in enabling Parliament to hold the government to account. However, we have found that IAs are being treated like speed limits—everybody says they are a good thing, but some take a more flexible attitude to complying with the requirements than others.”

Lord Hodgson added: “This new report identifies areas of weakness in the current system, and we urge the Government to address promptly the recommendations we have made as part of its review of the Better Regulation Framework. We do not consider our proposals unreasonable, given that departments were able to produce IAs to a much better standard in the years before 2017.”

Adam Carey