Effective regulation and policy making
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The Centre for Management and Policy Studies' Better Policy Making

4 EVIDENCE-BASED

The advice and decisions of policy makers are based upon the best available evidence from a wide range of sources; all key stakeholders are involved at an early stage and throughout the policy's development. All relevant evidence, including that from specialists, is available in an accessible and meaningful form to policy makers.Key points of an evidence based approach to policy-making include:

  • Reviews existing research
  • Commissions new research
  • Consults relevant experts and/or used internal and external consultants
  • Considers a range of properly costed and appraised options

 

HM Treasury: The Green Book: Appraisal & Evaluation in Central Government

PREFACE: The Treasury has, for many years, provided guidance to other public sector bodies on how proposals should be appraised, before significant funds are committed – and how past and present activities should be evaluated. Decisions taken at the appraisal stage affect the whole lifecycle of new policies, programmes and projects. Similarly, the proper evaluation of previous initiatives is essential in avoiding past mistakes and to enable us to learn from experience.
1.2 The guidance emphasises the need to take account of the wider social costs and benefits of proposals, and the need to ensure the proper use of public resources.
2.2 Appraisal and evaluation often form stages of a broad policy cycle that some departments and agencies formalise in the acronym ROAMEF (Rationale, Objectives, Appraisal, Monitoring, Evaluation and Feedback).
2.3 Appraisals should provide an assessment of whether a proposal is worthwhile, and clearly communicate conclusions and recommendations. The essential technique is option appraisal, whereby government intervention is validated, objectives are set, and options are created and reviewed, by analysing their costs and benefits. Within this framework, cost-benefit analysis is recommended, with supplementary techniques to be used for weighing up those costs and benefits that remain unvalued.
COST-BENEFIT ANALYSIS: Analysis which quantifies in monetary terms as many of the costs and benefits of a proposal as feasible, including items for which the market does not provide a satisfactory measure of economic value.
2.4 Appraisals are often iterated a number of times before their proposals are implemented in full.
2.6 The first step is to carry out an overview to ensure that two pre-requisites are met: firstly, that there is a clearly identified need; and secondly, that any proposed intervention is likely to be worth the cost.
2.7 The second step is to set out clearly the desired outcomes and objectives of an intervention in order to identify the full range of options that may be available to deliver them.
2.8 The third step is to carry out an option appraisal. This is often the most significant part of the analysis. Initially a wide range of options should be created and reviewed. The ‘do minimum’ option should always be carried forward in the shortlist, to act as a check against more interventionist action.
2.10 Following option appraisal, decision criteria and judgement should be used to select the best option or options, which should then be refined into a solution. Consultation is important at this stage, regardless of whether it has taken place earlier.
2.12 Evaluation is similar in technique to appraisal, although it obviously uses historic (actual or estimated) rather than forecast data, and takes place after the event. Its main purpose is to ensure that lessons are widely learned, communicated and applied when assessing new proposals.