Regulatory Impact Assessment:

Public Services Threshold Test

A Public Services Threshold Test is a preliminary evaluation that considers the time and money impacts of proposals on public services. In the case of proposals which impact on both the private and public sectors, it provides useful analysis of impacts to inform the costs section of the RIA. For proposals that impact on the public services only, as well as providing useful analysis, it determines whether an RIA should be completed.

A Public Services Threshold Test should be carried out at the very beginning of policy thinking. Its purpose is to improve public service delivery, by thinking through at an early stage possible impacts on service delivery and the staff supporting it.

Costs, in terms of both money and staff-time, should be considered.

Principles of Good Practice

Before a threshold test is carried out, and at the earliest stage of policy thinking, the following principles of good practice should be included as part of the consultation process:

• You have informally consulted the relevant frontline delivery staff
• You have considered simplifying or integrating existing procedures
• You have considered whether:

  - contact time with customers by frontline delivery staff is affected
  
  - your proposal affects any other part of government
  
  - other proposals have affected the same group of staff in the last 12 months, whatever the source
  
  - the proposal may require a significant re-design within next 12 months
  
  - your proposal would lead to an overall increase in local authority cost by over £100,000 a year.  If so, your department will be responsible for providing the funding under the new burdens principle.  As a result of the threshold test for RIAs, departments may not need to complete an RIA for initiatives, which the new burdens principle would still apply to.  It is important therefore that an assessment of implications for authorities is undertaken at an early stage, even though an RIA may not be required.  Further details on the new burdens principle is available from Paul Andrews at the Office of the Deputy Prime Minister on 020 7944 4013 (Web: http://www.local.odpm.gov.uk/finance/ssas.htm)

You should also refer to any further principles of best practice that your department has. Your Departmental Regulatory Impact Unit (DRIU) will be able to advise.

If your proposal impacts on local authorities, you may find this short guide to good practice methods and alternatives to intervention useful.

Defining Public Services

Schedule 1 of the Freedom of Information Act 2000 contains an extensive list of public authorities, and serves as a useful reference for departments. However, the list is not definitive and in case of doubt, you should contact the departmental legal advisors to discuss and determine the type of function.

What is a Gateway?

A fully functioning Gateway is a process for managing the quality and quantity of policy initiatives issued to local delivery organisations by a central government department. A typical process is centralised within the department, integrates input from relevant stakeholders and staff, and incorporates a set of criteria to regulate standards and the proportionality of each initiative against business requirements. The Public Services Threshold Test may be integrated with the gateway criteria, with an adapted monetary threshold beyond which a full RIA is required, and tailored to the particular functions of the department. CORIU must be consulted when the Gateway decides to set its own monetary threshold rather than use the CO default one.

The Gateway process may be supplemented by other centralised processes for minimising burdens on local public services and their staff. A process for reducing unnecessary data requests from the front-line is one such example.

Your DRIU can advise whether your department has a Gateway in place or any plans to create one.

What if my proposal impacts solely on public services?

You need to undertake both parts of the Public Services Threshold Test to provide analysis of the time and money impacts on public services and determine whether you need to complete an RIA.

What if my proposal impacts on public services and the private sector?

If your proposal impacts on both the private and public sectors, only part one of the Public Services Threshold Test – the Cost Calculation Table – need be undertaken. This will provide useful analysis of the time and money costs to public services and will inform the costs section of the RIA. The Table should be referred to in the Costs section of the RIA.

How do I carry out a Public Services Threshold Test?

The Public Services Threshold Test is a simple evaluation with two stages – a Cost Calculation Table, and Threshold Criteria. Both stages determine whether an RIA is needed, and must be completed.

Firstly, calculate the impact of your initiative or policy proposal, in terms of both time and monetary costs per Public Service Group of staff affected.

You will need to identify all groups of staff affected by the policy changes, both within your immediate public service, and in other interfacing public services where staff are providing continued or related services. Calculations should be completed in respect of each identified group of staff. For example, a new policy initiative being introduced by Department of Health on the care of elderly patients may affect GPs, hospital doctors and nurses in the NHS, and social services workers and administrative staff in local authorities. In this scenario, a breakdown of costs should be provided for each of the five identifiable groups of staff affected by the changes.

The total additional time it will take per person, in each Public Services Group to implement and/or carry out your proposal, should be calculated in hours per annum. The total hours per annum per Group should then be calculated, and then the sum of additional hours per annum for all relevant Groups recorded.

Monetary costs should be the sum of all costs, for example staff costs, training costs, and non-staff costs such as, IT installation costs, procurement costs, capital…

Secondly, apply your proposal to the Threshold Criteria. Criteria 1 provides a baseline figure of £5 million – if the total monetary cost of your proposal is greater than this, an RIA must be undertaken. If your department has a fully functioning
Gateway process, this baseline figure can be adapted in agreement with Cabinet Office Regulatory Impact Unit (CORIU) .

If your proposal is likely to attract high levels of political or media interest, Criteria 2, you must also undertake an RIA, even if the total cost is below £5 million.

Carrying out the Public Services Threshold Test will provide a good starting point (and calculation tool to return to) for drafting an RIA thoroughly assessing all relevant public services costs.

Public Services Threshold Test

All Public Services Threshold Tests should follow the structure of the template, which includes instructions for completion. This is available in the following formats:

Portable Document Format

Word Document

Rich Text Format

HTML (viewing only)

Do I need to do an RIA?

What if I don’t need to carry out an RIA?

Where an RIA is not needed, we recommend that the Public Services Threshold Test be attached to any submissions to your Minister that seek agreement to initiatives or policy proposals. It will help your Ministers to explain, where necessary, why an RIA was not undertaken.

Do I undertake an RIA in the usual way?

RIAs carried out on proposals impacting solely on the public services do not require a Small Firms’ Impact Test or Competition Assessment. This is the only deviation from the RIA process; all other sections of the RIA must be completed.

Partial RIAs for proposals impacting solely on the public services should still be included in formal consultation exercises; and full ‘public services’ RIAs must be signed-off, published, and put on departmental websites in the usual way. Please refer to consultation and ministerial sign-off/publication sections for full guidance.

Reference should be made in the Costs section of the RIA, to the calculations carried out in the Public Services Threshold Test.

Unlike the significant private sector, or mixed sector impacting RIAs, Cabinet Office RIU do not need to see solely public services RIAs.

If this is the first time you have written an RIA, we suggest you view the
RIA flowchart and the Starting an RIA section first.

Further Information

For further advice on how to carry out the Public Services Threshold Test, please contact your DRIU, departmental Gateway and Economists.