Why the government's impact assessment system is failing Parliament and the public – Lords Committee

In its 12th report of Session 2022–23 entitled Losing Impact: why the government's impact assessment system is failing Parliament and the public, the Committee notes that although the dual challenges of Brexit and the pandemic meant it was necessary for a time to produce legislation at speed these emergencies have now largely passed. However, the number of Impact Assessments (IAs) done badly, or simply not made available for scrutiny by the Committee and Parliament alongside legislation has increased. This is the latest in a series of reports produced by the Committee drawing attention to the growing imbalance in power between Parliament and the Government.

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.”

The report highlights the importance of IAs and the reasons why they are a crucial part of practical governance and good policy formulation, helping to ensure that legislation is cost effective and has had a proper level of public consultation. Departments that lay an IA late limit the opportunity for those affected by an instrument to challenge its content or the Government’s assumptions. For example, the Home Office recently revoked legislation to licence a chemical that could also be used as a drug the day before it was due to come into effect: it had believed only 65 firms used the substance, but an industry body subsequently told them it was closer to 7,500 firms and the system envisaged would, therefore, not work. The SLSC expressed its concern at this oversight in an earlier report on the matter.

The Losing Impact report emphasises that IAs, and other legislative supporting information such as Explanatory Memoranda, are not just “paperwork” but crucial in informing policy development as well as scrutiny both by Parliament and those directly affected by it. So, the IA must be available when an instrument is laid.

The Losing Impact report also draws attention to the fact that nearly half the instruments were not subject to any Post Implementation Review (PIR) despite this being required by statute. These PIRs play a vital role in checking whether the estimates were accurate, predictions were fulfilled and that the policy had achieved its intended outcome. In addition, the report cites the lack of a central authority enforcing the statutory provisions as a key reason for the weaknesses in the system.

Using examples from the Committee’s weekly scrutiny of secondary legislation, the Losing Impact report illustrates problems regularly found by the Committee and suggests some remedies including a simpler process that is reviewed earlier and properly tracked and enforced.

Commenting further Lord Hodgson of Astley Abbotts said:

“Providing Parliament with poor quality impact information or only providing the information after the scrutiny process is over is another example of the transfer of power from Parliament to the Executive that we highlighted in our Government by Diktat report.

“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.

“In particular we draw attention to the lack of Post Implementation Reviews as a reason for the failure to build up “institutional memory” to improve future performance.

“If Parliament is to perform its critical function of holding the Government to account, it is of paramount importance that the two Houses are given complete and comprehensive information about the basis on which policy choices are made and the reasons why alternative options have been rejected. We cannot perform that role without the right information at the right time.”