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Specific Impact Tests

The Government has developed a range of tests to ensure that policy development is joined up and that individual policy proposals take account of the Government's broad policy objectives. Some of the tests are designed to help policy–makers monetise costs and benefits, whether economic, environmental or social. Other tests enable policy–makers to identify non–monetised costs and benefits, or to identify the differential impacts of policy proposals.

The primary focus of an Impact Assessment should be on the analysis and quantification of costs and benefits: economic, environmental and social. Further information on this can be found in the Toolkit's guidance on appraisal of options.

Within the Impact Assessment template, the Specific Impact Tests checklist summarises a range of tests developed by government departments and underpinned by departmental guidance. The checklist may be supplemented with reference to the fuller table below, which sets out additional considerations.

Policy–makers are generally encouraged to consult the available departmental guidance on Specific Impact Tests at the early stages of policy–making. Except where there is a statutory obligation (see below), policy–makers must exercise their judgment in undertaking tests, ensuring that the overall analysis is proportionate and that a clear focus on cost and benefits is observed. Many tests have initial screening mechanisms that enable policy–makers to determine quickly whether further assessment is necessary or desirable.

The checklists will be of particular use in helping policy–makers consider how their proposals contribute to the five principles of sustainable development to which the Government is committed. The five principles are:

• Living within environmental limits;
• Ensuring a strong, healthy and just society;
• Achieving a sustainable economy;
• Promoting good governance; and
• Using sound science responsibly.

For further information about the Government's strategy on Sustainable Development see: Sustainable Development Strategy. Other relevant material is also available at the Sustainable Development Commission. Defra have developed a package of tools to help Government Departments embed Sustainable Development into policy making: (See Defra: Think sustainable)

• Specific impact tests: full checklist  (24KB)

It is a legal requirement for all policy proposals to undertake Race Equality, Gender Equality and Disability Equality assessments.

Handling of Specific Impact Tests

The following is intended to guide your handling of the Specific Impact Tests. The impacts are listed in the same order as they are listed in the template – see example below.

The purpose of the Competition Impact Assessment is to identify whether the impact of a proposal is pro– or anti–competitive and to assess whether this impact is significant. It is important to remember that regulations may actually promote competition. For example, rules on telephone number portability allow customers to retain their telephone number when switching from one Telecom Company to another and this encourages competition between telephone companies.

The Small Firms Impact Test

The Small Firms Impact Test (SFIT) becomes a mandatory part of the Impact Assessment (IA) process when your proposal imposes or reduces costs on business. It  has two main stages:

• Stage 1 – Starting the SFIT
• Stage 2 – Identifying and exploring more fully the potential to minimise the impact of the requirements on small firms e.g. exemptions, simplified inspection, less frequent reporting etc. for businesses with fewer than 20 employees.

Full guidance on the SFIT, available here Small Firms Impact Test, The SFIT can also help officials complete the cost benefit analysis part of the IA template. You should contact BERR’s Enterprise Directorate at the earliest stages of policy development if your proposal is likely to have a significant impact on small businesses. Enterprise Directorate can offer you assistance and advice on completing the SFIT. Call Enterprise Directorate on 020 7215 6032 or e-mail regulation@berr.gsi.gov.uk.

Whenever consideration is being given to the introduction of new criminal sanctions or civil penalties the MoJ Civil Legal Aid Strategy Team must be consulted at an early stage in the development of the proposal to discuss and agree the consequences for the workload of the courts and legal aid. In these circumstances, policy–makers will be required to complete a legal aid impact test, full details of which can found at: Department for Constitutional Affairs: Legal Aid Impact tests.

For Sustainable Development, see the Sustainable Development passage above.

Environmental impact tests

The Environmental impact tests enable departments to understand and quantify, in some cases through monetisation, the environmental consequences of their proposals.

• Since 2003, the Government has committed itself to making a carbon Impact Assessment an integral part of assessing environmental impacts. See further the material under carbon impact under appraising costs and benefits. Defra and the Treasury have developed guidance to help policy–makers identify whether policy options will have a significant impact on emissions of greenhouse gases. The guidance consists of an initial screening exercise (Step 1), followed by further steps if the screening suggests a potential significant impact. Where there is a significant impact, carbon costs should be monetised and factored into the Summary: Analysis & Evidence page.
• As part of Defra’s new PSA commitments, government is introducing an indicator to reflect our commitment of achieving emission reductions at least cost. The indicator will show ‘the proportion of emissions reductions from new policies below the Shadow Price of Carbon. New climate change policy (Impact Assessments from 1 April 2008) will have to report to this indicator unless emission reductions are below the de-minimis threshold. To help policy officials understand who needs to report to the cost-effectiveness indicator; how to report to it; where to report your findings; and where to go for further information and/or questions, guidance has been created on the Defra website.

The Health Impact Assessment (HIA)

The Health Impact Assessment (HIA)considers the effects policies, plans, programmes and projects have on health and well–being, and in particular, how they can reduce health inequalities. Non–health sector policies and projects, where health is not a primary objective, may have major implications on the health and well–being of people. HIA can ensure that the health and well–being of people likely to be affected by such policies and projects is maintained or enhanced. Screening questions for health and well–being can be found from the Department of Health: Health Impact Assessment.

Race equality

Race equality – as part of the statutory duty under the Race Relations Amendment Act 2000, listed public authorities, including government departments, are required to set out arrangements for assessing and consulting on the likely impact of their proposed policies on race equality. For further advice please see commission for Race Equality: Race equality impact assessment: a step-by-step guide. If your policy proposal will not have any race equality impacts then you should record this in this section of the Impact Assessment.

Disability equality Impact Assessment

Disability equality Impact Assessment is the process of assessing the impact of existing or proposed policies and practices in relation to their consequences for disability equality. It includes looking for opportunities for positive impact that may have been missed or that could be better exploited, as well as the detection of actual or potential negative impact for disabled people. Further guidance can be found at Disability Rights Commission: Disability Equality Scheme.

From 6 April 2007, public authorities need to assess the impact of new legislation, policies, employment practices and service delivery changes on men and women. Guidance can be found at Women Equality Unit: Gender Impact Assessment (PDF)

Will the proposals have Human Rights implications? Further details can be found at Ministry of Justice: Human Rights.

Rural proofing is a commitment by Government to ensure that all its domestic policies take account of rural circumstances and needs. It is a mandatory part of the policy process, which means that, as policies are developed, policy makers should systematically:

• consider whether their policy is likely to have a different impact in rural areas, because of particular rural circumstances or needs;
  make proper assessment of those impacts, if these are likely to be significant;
• adjust the policy, where appropriate, with solutions to meet rural needs and circumstances.
• Further details can be found at Commission for Rural Communities.

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