Effective Consultation
Comments from ACCA
September 2007
EFFECTIVE CONSULTATION: A CONSULTATION
Thank you for inviting us to submit ideas on the Government's proposals on effective consultation. ACCA (the Association of Chartered Certified Accountants) is the largest and fastest-growing international accountancy body with 296,000 students and 115,000 members in 170 countries. ACCA's headquarters are in London and the organisation has an extensive network of nearly 80 staffed offices and other centres around the world.
ACCA is involved in responding to numerous consultations throughout the year. This includes consultations issued by national Governments, international standard setters and regulators and supranational organisations. ACCA recognises the crucial role that consultation plays in ensuring effective policy making and strives to ensure that the views of our members are represented at the appropriate level.
ACCA members have expert insights to the whole economy. In the UK, for instance, 10% of our 61,000 members work in the public sector, 55% in industry and commerce and 27% work in public practice. In order to support this diverse membership base ACCA has a number of technical committees, working groups and interest groups which are able to provide expert comment and engagement on issues crucial to their sectors of work or professional interest. This enables ACCA to comment with authority on issues as varied as health sector matters to small business support.
1. Do you think the Government's Code of Practice has led to an improvement in the way the Government consults and to improved policy outcomes?
The introduction of the code of practice was a positive step forward in terms of codifying the procedures that Government departments must undertake during the process of consultation. Generally we believe that Government Departments have complied reasonably well with criterions one, two and three however criterion four has on occasion been adhered to in an incomplete manner or unsatisfactory manner. We are unable to judge criterion five as this relates specifically to internal processes of which we have little experience. Criterion six appears at first glance to be complied with. However, whilst Regulatory Impact Assessments (RIA) may well be initiated the quality and accuracy of RIAs has been called into question on a number of occasions and remains a concern of ACCA, particularly with regard to the evaluation of impacts on business.
The National Audit Office's (NAO's) series of compendium reports evaluating Regulatory Impact Assessments consistently shows that consultations generally follow the code of practice. All but three consultations in the most recent NAO sample had been issued for the required twelve week consultation period and 16 out of 19 RIAs were given the highest score for consultation.
ACCA's specific concerns regarding adherence to criterion four are related to the transparency of the policy development process and the feedback to those that respond to consultations. It is our contention that the quality of responses and level of engagement with the policy development process would be improved immeasurably by greater openness throughout the procedure. The consultations which ACCA have been involved in that have produced a summary of responses and provided some level of feedback do not rationalise the policy decisions sufficiently.
ACCA, like the NAO, believe that Bismark was wrong and it is better to see laws being made; and a transparent consultation process is part of achieving better laws and regulations. We, therefore, recommend regular auditing of the entire policy making process from conception to post-implementation review. An audit of this nature will highlight best practice, enable effective policy making and encourage greater engagement from civil society.
2. Are 12 weeks generally the right amount of time for the formal, written element of Government consultations to last? Do you think that there are circumstances where a shorter or longer duration may be more appropriate?
ACCA, as a professional body, has to deal with a number of different regulators, each of them with their own consultation procedures. Often it is necessary for financial market regulators to allow a very short period of consultation on urgent issues. Indeed ACCA has internal procedures to deal with these urgent consultations. However, unless there is a serious risk of a financial or physical detriment it does not seem justifiable for Government to allow a period of consultation shorter than twelve weeks.
Twelve weeks allows organisations such as ACCA to compile its response in the most appropriate fashion. Twelve weeks allows us to survey our members, as we are doing in the current European Commission simplification consultation, it allows us to discuss the matter in our many expert committees and it allows us, where appropriate, to seek clarification meetings with officials. We therefore do not wish to see any change in the length of consultation procedure. The current code allows flexibility by providing the opportunity for shorter consultations providing the consultation document explains why a shorter period was adopted.
Ensuring that the twelve weeks is generally adhered to increases the quality of consultation responses from third parties and therefore raises the standard of debate; ideally leading to an improved policy output. It is however important to note that there is no benefit in having a twelve week consultation that no one is aware of. Departments must ensure that not only their target audience but also civil society in general is aware of consultations being undertaken.
3. Is the system for monitoring and promoting performance of departments in relation to the criteria in the current Code of Practice on Consultation right? What improvements could be made?
As detailed above, the NAO's review of consultation within the context of RIAs appears to give the consultation process a clean bill of health. However, it remains a very real concern of ACCA that some consultations may be little more than 'rubber stamping' exercises designed to seek a pre-determined outcome. This cynicism is increasingly pervasive across civil society. It is therefore incumbent on departments to challenge and confound this cynicism.
Regular independent audits of the policy making process would open the entire process up and promote best practice and higher performance across departments.
4. Is the new approach to Impact Assessment sufficient to improve public consultation on the evidence base for Government policymaking? How could consultation policy improve consultation on Impact Assessments?
ACCA is generally in favour of the new impact assessment procedure, although its effectiveness in practice has yet to be determined. We are particularly keen on the introduction of the summary sheet. We think that this will increase the transparency of Government; simplify and focus the work of civil servants; and enable more considered policy decisions.
The summary sheet will encourage greater accessibility of the evidence base for the consultation process. The ability for business and civil society to weigh up how much each proposal will cost or benefit their business will allow them to prioritise their engagement in the consultation process appropriately. However this will only be achieved if the figures contained within the summary are credible. It continues to be the case that RIAs often demonstrate insufficient consideration of the impact of regulations. Indeed as the most recent NAO report into RIAs states: 'The Assessment of costs and benefits was, however, again the weakest areas, with deficiencies in the standard of the evidence base and limited use of recognised economic appraisal methods.'
As stated above the NAO gave a generally clean bill of health to the consultation process on RIAs. ACCA does not demur from this, it does, however, believe that the revamped impact assessment should enable business and individuals, where appropriate, to provide feedback and challenge the credibility of the figures included within the RIA. Government departments should welcome this feedback as part of the process of improving their evidence base and accuracy.
5. When in the policy development process do you think the Government should consult stakeholders?
ACCA is inclined to argue that an ongoing process of consultation should be adopted. The complete process of creating effective policy requires regular consultation from inception to implementation. When the kernel of an idea becomes a policy proposal, departments are obliged to draft an initial impact assessment. In producing this impact assessment the department must consult with those likely to be affected. This impact assessment is revised and developed allowing further consultation. Eventually the final consultation document is issued for consultation in line with the code of practice. The initial consultations at the impact assessment stage should be undertaken on a more informal yet open basis.
Adopting an ongoing process of consultation should not make the whole process more expensive as IT can be utilised to minimise costs. By opening consultation up throughout the process of policy development it should be more effective and deliver better outcomes for all.
6. Do you think that more emphasis should be placed on alternative or supplementary approaches to consultation in a revised consultation policy? What supplementary approach or approaches would work best for you/your organisation?
Departments should be empowered to adopt innovative new ways of seeking the very best of opinions and of getting responses from those who do not often engage with the consultation process. However a written consultation response remains an appropriate tool of consultation in many circumstances and it is unclear the extent to which new technologies are ready to produce considered responses to consultations on important matters. The example of David Miliband's 'wiki' on climate change policy is a case in point. In this example the debate on an important issue was not treated with the appropriate respect and the outcome disappointing. ACCA therefore believes that other approaches should remain a supplement to formal consultation rather than an alternative.
The supplementary approaches should also concentrate on ensuring that those that do not generally respond to consultations are enfranchised. This is particularly so for small businesses who are often unable or unwilling to consultations that may have a detrimental affect on their business.
7. How do you generally become aware of Government consultations and how would you like to learn about upcoming and current Government consultations?
ACCA has a process of logging new consultations and ensuring that a responsibility for responding and communicating our recommendations is adhere to. Previously the website www.consultations.gov.uk acted as a good source of open consultations however the search function and summary text were far from adequate. Announcements in the press or on news websites will also raise awareness. ACCA suggests that a redesigned website with improved search function and email alert service will help ACCA, and other organisations, become aware of open consultations.
8. How do you rate the feedback you have seen from Government departments following consultations and what improvements or changes would you like to see in relation to reporting back?
As stated at question one, ACCA believes that this is the one area of the code where significant improvements could and should be made. The feedback often provided by departments is merely a summary of responses received. It does not seek to detail why proposals are taken onboard or not. By providing a rationalisation of why consultation response suggestions are rejected organisations, such as ACCA, are afforded a greater insight into Government's thinking and will be able to contribute more effectively in the future.
The provision of the reason for taking or rejecting a proposal, as demonstrated by the better regulation portal, discourages cynicism amongst participants of the process, ensures better policy making and helps demonstrate a clear audit trail of policy development.
9. Is "consultation fatigue" an issue for you? If so, why is this and how do you think this issue could be overcome?
ACCA is keen to be involved in the consultation process of all bodies that influence the economic conditions and regulatory environment for our members. To this end we devote significant resources to the activity of prioritising and responding to consultations. We would therefore argue that although we do not suffer from 'consultation fatigue' we do however occasionally suffer from 'consultation cynicism.' The principal cause of this cynicism is the lack of transparency in the policy formation process and a general feeling that a decision has already been taken. Increasing the transparency of policy making will eliminate this cynicism.
10. Please feel free to give us any other views you may have about the effectiveness of current consultation policy, the future of consultation policy, the case studies in this paper and other examples from the UK or elsewhere.
We have no further views to provide at this time.
11. Do you think any of these options would make for a good consultation policy? If so, which option and what changes could be made to improve it?
Of the three options offered for consideration in the consultation paper, ACCA believes that the most effective way to improve the consultation procedure would to be to introduce the 'principles-based approach.' This option allows departments to utilise the most appropriate methods to investigate a policy issue thoroughly. However, when recommending this issue we feel that Government departments must not be allowed to adopt this option without strengthening their procedures to ensure that the ensuing policy debate is conducted in an open and transparent manner.
We therefore propose that a 'principles-based approach plus' be adopted, what we mean by this is that in the first instance Departments would be able to operate a principles based approach. Yet, if there is significant objections from civil society about the means and details of a consultation an independent hearing could be convened. The objection, if upheld by the hearing, would compel the Department in question to carry out a more traditional consultation and feedback process. This solution offers a flexible approach yet includes checks and balances to uphold confidence in the system
Accompanying this approach a regular independent audit of policy making from inception to implementation will compel Departments to provide rationalisations for the consultation methods adopted.
12. Are you content with the Government's preliminary analysis that the options identified in the consultation document would not impose costs on the private or third sectors?
We do not believe that the changes detailed in the response would impose additional costs on the private or third sectors. Although we will point out that smaller business often operate with significant constraints on their resources and so face greater barriers to their involvement in the consultation process. One of the major barriers is cost, therefore in relevant consultations Departments should make it a priority to lower the barriers to small business engagement and seek their input.