Auditor General questions accuracy of Well-being of Future Generations (Wales) Bill costs

Article by Karen Whitfield, National Assembly for Wales Research Service

 On 1 October 2014 the Auditor General for Wales gave evidence to the Environment and Sustainability Committee on the Well-being of Future Generations (Wales) Bill. Following this session, the Committee asked him to undertake an audit of the work underlying the Bill’s Regulatory Impact Assessment (RIA), looking specifically at the expected costs of implementing the Bill. This request was endorsed by the Public Accounts and Finance Committees. The recent Environment and Sustainability Committee report on the Bill recommended that the Welsh Government should take note of the Auditor General’s work on this, and update the RIA accordingly. The Auditor General’s report was published on Thursday 4 December 2014 and the main conclusion was:

the Regulatory Impact Assessment understates the costs of current arrangements and the likely additional costs of implementation and the Welsh Government’s assumptions require further testing with the public bodies affected.

Key criticisms of the way in which the RIA was produced included:

• lack of clarity and consistency in the way that cost data is presented;
• omission of explanations of the underlying assumptions or methods used to calculate some of the costs;
• different methods used to calculate the cost of staff time in carrying out various tasks; and
• failure to test assumptions and costs with individual public bodes affected by the Bill.

So far the Welsh Government has accepted the need to consult and test assumptions further with the public bodies affected by the Bill, but it does not accept that the costs are understated. The Auditor General makes 9 recommendations in his report which, in summary, suggest that the Welsh Government should:

1. revisit all costings that are based on assumptions about cost rates and time commitments of staff;
2. update the RIA so it contains a clear summary table of the indicative cost of the Bill overall, with a more consistent presentation of the comparison of costs of the ‘do-nothing’ and ‘introduce legislation’ options;
3. revisit its assumptions about the extent to which the Bill will impose additional costs by involving public bodies and local service boards in a full assessment of current arrangements against the Bill’s requirements;
4. further consider the cost implications of the alignment of the Bill’s planning and reporting requirements with each other and with existing requirements (such as those under the Local Government (Wales) Measure 2009 and the NHS Wales Planning Framework);
5. further consider the cost implications of monitoring the achievement of well-being objectives by the Auditor General, the Future Generations Commissioner and the Welsh Government;
6. present a longer term view of the likely costs of the Bill over the period of time that the Bill is expected to apply, not just for the next five years, recognising the long-term principle within the Bill itself;
7. be clear about the basis for any assumptions made in the RIA;
8. address other points of detail raised in Auditor General’s report, as part of the RIA update; and
9. review and strengthen procedures for the development of future Regulatory Impact Assessments, including protocols for engaging with stakeholders.

The Auditor General’s report will help inform today’s plenary debate on the general principles of the Well-being of Future Generations (Wales) Bill. In particular it will aid debate of the Financial Resolution required under Assembly Standing Orders before Stage 2 of the Bill can commence.