Benefits of New Rules Outweigh Costs
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Issued 21 October 2009
The benefits of new regulations enacted in the last financial year outweighed
the costs by £9 billion and at a ratio of nearly 2 to 1, according to new
figures published by the Department for Business, Innovation and Skills today.
The figures, published as part of a new benefit – cost ratio, showed that
overall quantifiable benefits exceeded costs by about 85 per cent, meaning that
Government regulation is expected to deliver £1.85 in yearly benefits for every
£1 of cost, or a ratio of 1.85 to 1. The publication of the ratio, covering the
entire legislative programme in 2008-09, will be published annually in the
future.
The Pensions Act 2008, aimed at enabling and encouraging more people to build
up a private pension income to supplement the money received from their basic
State Pension, is an exceptional piece of legislation which has a significant
effect on the overall ratio, with the highest benefits and costs. If removed the
benefit to cost ratio increases to 4 to 1, revealing a generally higher rate of
return from the impact of regulation.
The benefit-cost ratio is drawn from the detailed assessments of the impact
of new regulations produced by government departments and regulators. All
departments and regulators that introduce new regulations that have a cost or
benefit must produce a full Impact assessment which must be published in an
online library.
Ian Lucas, Better Regulation Minister, said:
“Publishing these figures shows that Government is serious about making sure
that all new regulation is justified and proportionate and that the costs of
regulation are justified by the economic benefits provided. It builds on our
commitment to increase transparency and accountability, following on from the
publication of the Government’s forward regulatory programme.
“We recognise that the cost of regulation is a key concern, especially to
business, which is why this new measure helps us keep better control of the flow
of new regulations.
“Regulations provide essential protections to employees, employers and
citizens. Striking the right balance between costs and benefits is vital to make
sure the regulatory framework is fit for the 21 st century.”
Notes to Editors
1. The Department for Business introduced a commitment to publish the
benefit-cost ratio of new regulations, as part of its most recent Public Service
Agreement. The information is drawn from Impact Assessments that are published
through the IA Library, which can be found at
www.ialibrary.berr.gov.uk.
2. The ratio is based on Impact Assessments (IA) that relate to legislation
enacted in the 2008-09 financial year. IAs include the average annually
recurring benefits and average annually recurring costs of regulation. The
benefit-cost ratio is calculated as the ratio of the total equivalent annual
benefits to the total equivalent annual costs based on data from published
Impact Assessments. 196 Impact Assessments were included as part of the 2008-09
benefit-cost ratio.
3. A full breakdown of the ratio and a list of the 196 Impact Assessments
included in the benefit-cost ratio can be found at
www.berr.gov.uk/whatwedo/b re/index.html
Department for Business, Innovation & Skills
The Department for Business, Innovation and Skills (BIS) is building a
dynamic and competitive UK economy by: creating the conditions for business
success; promoting innovation, enterprise and science; and giving everyone the
skills and opportunities to succeed. To achieve this it will foster world-class
universities and promote an open global economy. BIS - Investing in our future.
About the Author
© Crown Copyright. Material taken from the Department for Business, Innovation & Skills. Reproduced under the terms and conditions of the Click-Use Licence.
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Article Published/Sorted/Amended on Scopulus 2009-10-22 12:04:39 in Business Articles
