This document provides an overview of methodologies and regulatory impact assessments (RIAs) used in the UK. It discusses: 1) Guidance documents like the Green Book and Magenta Book that provide frameworks for policy appraisal and evaluation. 2) The purpose of RIAs is to make policy more evidence-based, ensure stability in legislation and business, and increase transparency. 3) The RIA process involves identifying the problem, objectives, options, impacts, costs/benefits, and includes public consultation and monitoring. Proportionate analysis is key.

1. Methodologies: UK
Rachel Holloway
Regulatory Delivery

2. Objectives
• Methodologies in the UK
• Tools, techniques & guidance to assist
• Example of a method: Small and Micro Business
Assessments
• Cost Benefit Analysis
• Strategies for dealing with an absence of data
• Q & A

3. Available guidance
Green Book and Magenta Book
Framework for the appraisal and evaluation
of all policies, programmes and projects in
Central Government
Tax policies
HMT specialism
Spending policies
Business Case
Guidance
Regulatory Policies
Better Regulation
Framework Manual

4. The Purpose of IAs
• To make policy making more effective and evidence
based
• Ensure stability in the legislative environment
• Ensure stability in the business environment
• Increased transparency in policy making

5. The RIA Process
Research skills are necessary to find, analyse and interpret
Information, data and other evidence
Ask experts in Government and Stakeholders outside to help you
analyse your data and build relationships.
Step 1
Identify
the
problem
Step 2
Set
Objectives
Step 3 Step 4 Step 5 Step 7
Identify
Options
Identify
Impacts
Value Costs
and
Benefits
Public
Consultation
Monitoring
and
Evaluation
Step 6
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6. Analytical frameworks
Prompts key questions to be asked:
1. What is the problem?
2. Why is change needed?
3. Where do we want to be?
4. How could we get there?
5. What are the possible impacts of these options?
6. Which is the best route based on the evidence?
7. How will legislation be implemented, enforced and monitored?
8. Will the benefits justify the costs?
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7. The RIA Process
Policy
Development
Stage
Progression of analysis – assuming full quantification is possible
and proportionate
1: Identify 2: Describe 3: Quantify 4: Partially
monetise
5: Fully
monetise
Development   ? ? 
Options   ? ? 
Consultation   ? ? ?
Final Proposal     
Enactment     
Core Principle – Proportionate Analysis
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8. Better Regulation in practice
• Guidance for officials. Sets
out:
• What you must do
• Provides tools, techniques
and points of contact to
help develop your IA.
• An example and some case
studies.
• Is published online &
promoted to business
• Living document –
currently under revision
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9. The RIA Process
Research skills are necessary to find, analyse and interpret
Information, data and other evidence
• Quality in RIA is entirely dependent on how you work
• You need to develop a number of core skills to be
successful
• A RIA Report takes time. It is a record of the
development of a proposal.
• Proportionate analysis is a core principle.
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10. The RIA Process
Core Skills
• Developing and using a
sound evidence base
• Data Analysis
• Quantitative
• Qualitative
• Stakeholder engagement
and management
• Effective communication
RIA is like
doing a...
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11. Definitions
What is a small/micro business or civil society
organisation?
Defined in the BRFM as those employing up to 50 full-
time equivalent employees.
When is a SaMBA required?
BRFM states that it is mandatory for all new domestic
regulatory proposals, except those which qualify for the
Fast Track.

12. Exemption
• Assumption that when a large part of the intended
benefits can be achieved without including smaller
businesses, an exemption will normally be applied.
• Should also consider partial exemption or mitigation.
• Think carefully whether it is necessary to extend a
measure to small and micro businesses at the outset of
policy development.

13. Not exempting
A regulation can be extended to smaller businesses if:
• any disproportionate burdens have been mitigated; and
• the exemption of small businesses is not viable or
compatible with achieving a large part of the intended
benefits of the measure.

14. Exemption and mitigation
Source: RPC guidance
Large parts of benefits maintained when
applying an exemption
YES NO
Disproportionate
burdens and / or
if it is viable to
mitigate costs
YES
Exemption
should be applied
Disproportionate
costs to small
businesses should be
mitigated
NO
Neither
exemption nor
mitigation required

15. Why is cost benefit analysis
important?
• Allows us to:
• Choose the best available policy option
• Identify key impacts of a policy
• Measure how different groups will be affected
• This in turn leads to:
• Maximum benefit for society
• Minimum cost to the taxpayer
• Transparency about what government is doing

16. Key elements of cost benefit analysis
• You should aim to identify all costs and benefits, describe them as
well as you can. There is sometimes no market price for benefits.
These should be thoroughly assessed and described qualitatively.
There are methodologies available to apply a monetary value to
them.
Example: Impact of a proposal to reduce regulatory requirements
under an existing inspection regime. This proposal would reduce
burdens on business. The proposal is expected to affect 18K
businesses, and reduce the time needed for the business manager
(wage rate of €27) to prepare for the inspection, from 8hrs to
6hrs, and also reduce the frequency of inspection from once a
year to once every two years.

17. What to do when you have incomplete
data?
• Use best available data & consult!
e.g. “Do you believe the assessment of costs and benefits
in the Impact Assessment are realistic? If not, is there any
further evidence that you can provide that should be
taken into account?”
• 75% of responses said they estimated higher costs for
average cost per hour of senior qualified inspector than
our RIA had.
• We revised initial RIA for the draft Bill upwards by 50%
from £18.50 to £27.75
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18. International comparisons & links
• Very limited comparators, only 1 other country was about
to introduce the same system
• The RIA was explicit about the poor data, the work they
were undertaking to address & caveated their analysis
“A key difficulty in evaluating this policy, however, is the lack of
quantifiable evidence on the likely impact of standardised
packaging, given that no country has yet introduced this
measure. One approach to address this limitation is to elicit
subjective judgments on the likely impact of standardised
packaging from a range of experts in this area.”
“A substantial impact on consumption is plausible but we need a
better idea of its likely scale (from our expert panel), its cost
implications and any impact on duty free imports.”
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