Regulatory Impact Assessment
166. A Regulatory Impact Assessment (RIA) is
an analysis of the costs, benefits and risks associated with a
range of policy options. In August 1998 the Prime Minister announced
that no policy proposal which has an impact on business, charities
or voluntary bodies should be considered without an RIA being
carried out.
167. Compared to many other RIAs, the assessment
published in support of the draft Bill is thorough. Costs and
savings associated with implementing the Green Paper proposals
are compared with the option of doing nothing and, in accordance
with Government guidance, estimates are presented as ranges, with
some indication of the impact of changes in assumed input values.[135]
168. While we do wish to record our appreciation
of the Department's work on this assessment, there are some shortcomings.
The presentation of the RIA is somewhat confused, with the connection
between assumptions and estimates not always made explicit and
the choice of values sometimes appearing arbitrary.
169. For example, on enforcement orders, costs
at the low-end of the estimate range are based in part on assumptions
that the Green Paper proposals will lead to an 80 per cent reduction
in enforcement cases each year and that just 1 per cent of these
applications will result in an enforcement order, while high-end
costs assume that there will be no reduction in the number of
enforcement cases per year and that 3 per cent of these applications
will result in an enforcement order.[136]
The RIA fails to provide the reasoning behind the selection of
these input values, however, nor does it provide any indication
of how likely such outcomes are expected to be in reality.
170. The presentation is further confused by
the listing in the RIA of costs for supporting advice and help
agencies which appear to have already been committed and will
therefore exist even in the absence of the Bill. This makes it
harder to establish the additional costs solely related to the
proposals in the Bill.
171. We recommend that, in presenting the
final RIA, the Government makes clear the basis of its assumed
input values, makes explicit the connection between assumptions
and associated estimates, and indicates the probability of costs
and savings leaning towards the low- or high-end of the estimates.
We also recommend that a summary of the estimated costs and savings
associated with the two options is presented, so as to allow comparison
of the relative merits of each proposal.
172. More fundamentally, the RIA suffers from
a lack of empirical data in relation to child contact activity
in the courts. As such, several of the assumed input values which
underpin the various low- and high-end estimates are based on
sample data from just one piece of research.
173. For example, the RIA is consistent in its
assumptions that there are currently some 7,000 enforcement cases
annually and that approximately 60 per cent of parties in contact
cases are legally aided. These figures are derived from an analysis
of 300 cases,[137]
but a recent study by the University of East Anglia into 59 cases
in Essex has produced quite different results.[138]
Despite the uncertainty, the RIA does not present a systematic
analysis of the sensitivity of the various costs and savings estimates
to alterations in these inputs.
174. In response to questioning, the Department
has told us that its estimates are designed to be "illustrative"
only.[139] While we
acknowledge that the Department has allowed for the uncertainty
of many of the data inputs by presenting its estimates as ranges,
we are surprised that it has not sought to achieve greater certainty
by entering into further research into the current level of child
contact activity in the courts. Moreover, we are disappointed
to hear that the Government has no plans to introduce more systematic
collection of those statistics currently only estimated from samples.[140]
175. We recommend that, prior to the introduction
of the full Bill, the Government improve their knowledge of current
child contact activity in the courts, either through direct collection
of statistics or through further sampling. Doing so will allow
the Government to either rely less on assumed inputs or improve
its confidence in its assumptions, and so narrow its costs and
savings estimate ranges.
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