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What are the costs and benefits?

For any new policy you should carry out a whole lifecycle assessment of all the costs and benefits associated with the policy.

The purpose of cost-benefit analysis is to determine if expected benefits are sufficient to justify the associated costs. Policies designed to meet the needs of the present may also result in costs or benefits to the economy, environment or social welfare which will be manifested only in the future and which need to be taken into account.

The principle of sustainable development requires that a full analysis of the costs and benefits of the policy proposal are carried out so that the welfare of future generations is not compromised. This will help to deliver the Government's commitment to sustainable development. Therefore the cost-benefit analysis must take account of a wide range of costs and benefits, which may be broadly categorised into three groups:

• Economic impacts
• Social impacts
• Environmental impacts

These impacts should always be qualified, and quantified where possible, and included in your assessment. Detailed guidance on how to measure these impacts can be found within the HM Treasury Green Book. Where there is a trade-off between the social, economic and environmental impacts, this should be captured in your analysis.

In assessing the costs and benefits, you should also consider the risks associated with the policy, and whether you have made appropriate use of scientific advice

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