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Guide to Cabinet's Impact Analysis Requirements

13. Regulatory proposals with inadequate Impact Analysis

Impact Analysis may be considered inadequate where:

  • there is no accompanying Regulatory Impact Assessment for the government regulatory proposal in the Cabinet paper and Treasury has not granted the proposal an exemption from Cabinet's Impact Analysis Requirements
  • the accompanying Regulatory Impact Assessment in the Cabinet paper has not been independently quality assured or has been assessed as “does not meet” the Quality Assurance criteria.

13.1.  Early warning

Ministers have expressed a strong preference for early warning about proposals with inadequate Impact Analysis.

Early warning is the primary responsibility of the agency responsible for preparing the Regulatory Impact Assessment, and needs to be given sufficient priority by agency officials. Further, for any significant Regulatory Impact Assessment that has not met, or in the view of Quality Assurance assessors is unlikely to meet, Cabinet's Impact Analysis Requirements, Treasury may advise the Minister of Finance and the Minister for Regulatory Reform.

In many cases where Quality Assurance assessors conclude that a Regulatory Impact Assessment does not meet the Quality Assurance criteria, you may be able to revise your Regulatory Impact Assessment to address the identified deficiencies and have it reassessed before it is lodged. This may, for instance, require the Cabinet submission to be delayed and is therefore something that you will need to discuss and agree with your agency leadership and Minister as relevant.

Sometimes it is not possible to improve the Impact Assessment to the extent that it “partially meets”, so the proposal is lodged with Cabinet Office accompanied by a Regulatory Impact Assessment that “does not meet” the criteria. There may also be a small number of Cabinet papers that involve regulatory options but are not accompanied by a Regulatory Impact Assessment and have not been exempt from the requirements.

13.2.  Cabinet Committee Chair discretion

The relevant Cabinet Committee Chair has discretion on whether Cabinet papers containing with inadequate Impact Analysis are considered by the committee.

13.3.  Supplementary Analysis Reports

In the event that a Cabinet paper with inadequate Impact Analysis does proceed and substantive decisions are made, a “Supplementary Analysis Report” is required.

To help ensure that the Supplementary Analysis Report fulfils a useful purpose, the nature and timing is to be agreed by the responsible Minister and the Minister for Regulatory Reform.

In most cases, the Supplementary Analysis Report would provide Ministers with a final reassurance, or otherwise, of the policy they have approved. The report would be a form of regulatory “pre-mortem”, which systematically analyses the risks associated with the proposal and how these have been, or will be, mitigated. It would provide an additional check point at which the evidence base and free and frank advice can inform Ministers. Such analysis is good practice in any event as it informs implementation planning.

The Supplementary Analysis Report may also include matters such as:

  • supplementary analysis on specified issues (for instance, on costings, compliance levels, implementation plans) to inform implementation decisions
  • the findings of consultation on an exposure draft of the regulatory measure
  • a commitment to report the findings of a post-implementation review
  • a commitment that the original Cabinet paper be published — this would aid transparency by showing the information that Ministers did have available to them.

To assist transparency, the Supplementary Analysis Report is required to reference the particular purpose for which it is required, including the stage at which it is provided to Cabinet. It is a separate standalone document and is required to be published along with the original Regulatory Impact Assessment, if any.

Supplementary Analysis Reports are subject to Quality Assurance requirements in the same way as are Regulatory Impact Assessments. Each Supplementary Analysis Report will be assessed against its fitness for purpose to the task it was set, including its adequacy to support any decisions it may be designed to inform.

The Supplementary Analysis Report requirement covers the situation previously addressed by the requirement for post-implementation review, as agreed by Cabinet in 2009.

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