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Public Sector Impact Assessments

Impact Assessments are required for proposals that are not regulatory in source but nevertheless impose costs on public sector or third–sector organisations that deliver public services. For example, changes to reporting requirements, revisions to criteria for releasing funding and the imposition of new targets could all have an impact on costs which should be assessed. However, a proportionate approach should be used. If the cost of the proposal is below £5 million and is not likely to attract high levels of political or media interest, only a development/options stage Impact Assessment is necessary – see the Impact Assessment Guidance from the link below for an explanation of these stages.

You should use the Impact Assessment process when considering whether a proposal impacts solely on public services. However, the content of the Assessment should be proportionate to the problem involved and the size of the proposal.

At the very beginning of thinking about the policy you should undertake an Impact Assessment at the development and/or options stages. This involves identifying the policy problem, gathering evidence, considering the rationale for government intervention, specifying objectives and considering options for delivering the outcome. You should also think through possible impacts on service delivery and the staff supporting it.

  • At this early stage, you should also consider whether the proposal imposes or reduces costs on businesses or the third sector. If it does, you are required to undertaken a full Impact Assessment, taking it through all the stages specified at in the Impact Assessment Guidance
    If your proposal relates only to the public sector, you should apply the threshold criteria (specified below) to determine whether you need to continue with an Impact Assessment beyond the development and options stages.

    At the development and options stages the Impact Assessment should inform and accompany your scoping submission to Ministers. It should include your best estimates of the possible risks, benefits and costs for each option to deliver the proposal, and will help you to identify areas where you need more information.

    You should report estimates of the costs and benefits on the Summary: Analysis & Evidence page, indicating one off and average annual (excluding one–off) costs and benefits. If appropriate, you could also indicate costs for different groups of staff affected by the policy changes, both within the immediate public service and in any other interfacing public services where staff are providing related services. Non–staff costs should also be calculated (e.g. IT installation costs, procurement costs and capital).

    When you have drafted your development/options stage Impact Assessment you should consider the results against Threshold Criteria.

  • if the total monetary cost of your proposal is greater than £5 million, a full Impact Assessment must be undertaken (although assessing impacts on small firms or on competition would not usually be necessary);
  • if your department has a fully functioning Gateway process, this baseline figure can be adapted in agreement with BRE;
  • if your proposal is likely to attract high levels of political or media interest, you must undertake a full Impact Assessment, even if the total cost is below £5 million.

Local authority costs – If your proposal would lead to an overall increase in local authority cost by over £100,000 a year your department will be responsible for providing the funding under the new burdens doctrine.

Defining Public Services: Office of Public Sector Information: 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 your departmental legal advisors to discuss and determine the type of function.

Departmental Gateways: 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. (See Department of Health: Gateways). 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. A development/options stage Impact Assessment for the public sector may be integrated with the Gateway criteria but you must consult the BRE when the Gateway decides to set monetary thresholds that differ from those outlined above. This is distinct from OGC Gateway Project Reviews.

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