Business and Regulatory Impact Assessment (BRIA) - Toolkit

When should a BRIA be undertaken?

The Scottish Government expects the completion of a BRIA as best practice for any policy proposal (this includes new policy, regulations or guidance). The Scottish Government is also required under the UK-EU Trade and Cooperation Agreement (TCA) to conduct an impact assessment for any major regulatory measure. Where a BRIA is not completed, the justification should be shared and agreed with Ministers. BRIAs should be proportionate to the significance of the policy and the magnitude of the expected impact; however without undertaking assessment it will be difficult to understand the significance and size. Even where the impact is not expected to be significant, a clearly drafted and evidenced BRIA can either confirm this, help with engagement with affected stakeholders or help identify unexpected or unintended consequences.

Engaging with businesses and identifying impacts at an early stage of policy development is important in ensuring the outcomes are realistic and as effective and beneficial as possible. This engagement should begin as soon as the underlying issue is first identified. Officials are expected to start development of a BRIA early in the policy development cycle, and as feedback is collected and analysis developed the BRIA can be refined. A Partial BRIA can be published at any point to support engagement with stakeholders, but any formal consultation must be accompanied by a Partial BRIA setting out the Scottish Government's understanding of the issue and potential impacts at that point.

Defining a business

A BRIA requires officials to consider the impact of proposed polices, regulations etc. on businesses. The Business engagement handbook sets out in more detail what is meant by 'business', but broadly it covers 'any organization or enterprising entity engaged in commercial, industrial, or professional activities'. We recommend that officials take as broad an approach as possible to defining 'business'. This will include commercial enterprises, social enterprises, not for profit organisations and third sector/ public organisations undertaking commercial activities in Scotland. This includes businesses abroad importing or investing into Scotland.

Completing an Impact Assessment

This guidance should be used alongside the Business and Regulatory Impact Assessment (BRIA) template when undertaking the Business and Regulatory Impact Assessment (BRIA). The guidance and template have been developed to help officials undertake the BRIA in the most effective and consistent way. The content, details and size of each BRIA will be dependent on the subject; however, each BRIA must follow the provided template. This ensures consistency across policy areas, as well as helping confirm that each section has been considered.

Portfolio areas are responsible for the content of their own BRIA. The New Deal for Business Delivery Unit owns the BRIA template and can provide advice on completion, but does not currently provide a Quality Assurance service for completed BRIAs - businessregulationengagement@gov.scot.

At the start of an impact assessment, it is important to identify:

• the analytical support required and the external stakeholders who may be affected or expected to support or input;
• the problem, its scale and the context in which it arises;
• evidence and nature of the problem; and
• the probability that it will occur and frequency.

BRIA should be approved by relevant Ministers and published on the relevant policy area's section of the Scottish Government website, alongside any other relevant documentation. A BRIA is expected to be considered for all policy and regulation developed unless it is clear there will be no impact on businesses or regulators. If, having appropriately consider the impacts, policy leads do not feel there is a need to carry out and publish a BRIA, they should advise the relevant Minister and seek agreement as part of the Ministerial submissions on the subject. The justification for this should be provided and may be subject to scrutiny from Ministers and the independent Regulatory Review Group.

A Partial BRIA can be completed and published during the policy development process to support engagement and allow feedback on the expected impacts to be gathered. It may contain more options and less detail, setting out officials understanding at that point. A Partial BRIA must be published alongside any public consultation/ significant stakeholder feedback exercise, with a Final BRIA published later based on refinement and further development.

Officials should consider the broad range of stakeholders that may engage with a BRIA such as businesses, their representative organisations and members of the public, both in and outside Scotland. It may be helpful to use existing stakeholder groups or to establish one with external stakeholders to support development of the policy proposals and BRIA, Terms of Reference can be drafted to support any confidentiality requirements. Every effort should be made to ensure the contents of the BRIA are presented in as accessible a format as possible.

The Scottish Government uses APS to publish its Impact Assessments. They may provide some feedback on accessibility of the document, and so should be provided with the document to be published as promptly as possible. They should not be used as reviewers of the content, which remains an SG responsibility.

Completion of a BRIA may be outsourced. However, officials who own the policy proposals remain responsible ensuring the content meets expectations and is accurate. The final document is an SG publication, and so should be done so by APS.

Evidence sources

Information on the business base in Scotland is available on the business and innovation statistics section of the Scottish Government website in the Businesses in Scotland and the Scottish annual business statistics publications.

Information on the business conditions is available on the business and innovation statistics section of the Scottish Government website in the Latest Business Insights and Conditions Survey (BICS) survey publications.

A summary of key business resilience metrics from the BICS publication by sector has been compiled by the Office of the Chief Economic Adviser and is available to officials. This was a commitment in the New Deal for Business work to monitor and report business resilience regularly using a consistent set of business resilience metrics that can also be used in Business Regulatory Impact Assessments. These include

• Economic performance overall, and by sector and trend since pandemic.
• How long cash reserves will last, by sector and trend since the pandemic.
• Business risk of insolvency, by sector and trend since the pandemic.
• Business debt repayments as share of turnover, by sector and trend since the pandemic.
• Confidence in meeting current debt obligations, by sector and trend since the pandemic.
• Difficulties recruiting employees, by sector and trend since the pandemic.
• Ability to get the materials, goods or services needed from within the UK/EU, by sector and trend since the pandemic.

A synthesis of the performance of the Scottish economy including a synthesis of latest business conditions is published monthly on the Scottish Government website.

Available guidance

This guidance is designed to be used alongside the provided BRIA template (as well as accessibility IA guidance?). It covers each section of the template, what is expected to be include as well as guidance on how to complete.

Example BRIAs will be available from the New Deal for Business Delivery Unit at businessregulationengagement@gov.scot. The template and structure of the BRIA has been updated, and so older examples may look different. However, it may still be helpful to consider how they undertook the process of completion, and how costs/ impacts have been presented.

Guidance on other impact assessments is available to officials on the Scottish Government intranet and from the relevant teams.

Consumer Scotland is responsible for issuing the guidance for the Consumer Duty and further information can be found on the Consumer Scotland website.

In conjunction with this toolkit please refer to the APS Publishing Compliance Guidance which gives advice on accessibility compliance when preparing your document. In addition to that guidance please also refer to the Impact Assessment Template Compliance Guidance (APS Group) document which highlights some of the key requirements, along with visual examples.