Today the Better Regulation Executive announced plans for new guidance to departments for compiling Regulatory Impact Assessments which coincided with a new report published today by the BCC, which reveals serious shortcomings in the RIA process.Key findings revealed:

* 71% of RIAs assign benefits to business without quantifying them.
* 16% have no small firms impact test (against Cabinet Office guidance)
* Less than 8% of those that carry out a small firms impact test assign additional costs to small business.
* Over half of UK RIAs do not explore the ‘do nothing' option.

Failings of RIA's initiative extend beyond the UK with assessment of the EU revealing:
* less than 10% quantify the costs and benefits to business.
* Only one EU Impact Assessment (IA) quantifies the impact for Small to Medium-sized Enterprises. Another 38 identify additional costs but don't quantify them.
* 98 (of the 160 produced between 2003-06) do not consider the cost to SMEs at all.
* Nearly 40% of EU IAs are targeted at non-binding instruments

This shows that the key policy-tool of the Government's "Better Regulation" initiative is failing to ensure that the regulatory burden in the UK does not increase. The 2007 BCC Burdens Barometer found that red tape costs the UK economy more than £55bn. By not effectively challenging new EU or UK regulations, the Government is placing business, SME's in particular, at a competitive disadvantage.

Commenting on the report and the launch of the new screening process Sally Low, Director of External Affairs and Policy at the British Chambers of Commerce said:

"We hope that the changes in departmental guidance will ensure that the RIA helps to reduce the regulatory burden rather than simply providing a means to facilitate costly regulation.. Our research highlights the need for the Government to ensure that departments are applying the RIA process rigorously to new policy proposals.

"What is most worrying is that government, at both a UK and EU level, are failing to think small first. Considering that SMEs employ most of the private sector workforce and are the drivers of growth across Europe, this is a deeply concerning omission.

"We hope that this overhaul of the current vetting process will lead to a marked change, not a small step in helping to reduce the regulatory burden . We will continue to monitor the process to see if new guidance delivers the culture change within departments which is required."

Tim Ambler of the London Business School, one of the authour's of the report commented:
"Government talks less regulation but has actually increased it by 50%. Parliamentarians have to power to stem the flow but fail to exercise it."