Business and Regulatory Impact Assessment (BRIA) - Toolkit

Section 2: Engagement and information gathering

Engagement Approach

The overarching approach to engagement should be detailed by officials, covering the full length of the planned policy/ regulation development. Where possible timelines for different key planned actions should be set out.

The groups that have been engaged with should be set out in the relevant sections below. Each individual comment does not need to be set out in the BRIA; however, a summary of views is helpful. The content of feedback should be used when considering the options under consideration and the potential costs/ impacts/ benefits in the relevant sections later in the BRIA. More detailed reporting of feedback may be provided as an annex/ alongside policy documentation.

Officials should consider the different groups (in and outside Scotland) that it will be important to engage with and recognise that each group may require different approaches to engage effectively Key stakeholder groups will include a combination of other Scottish Government officials, the independent Regulatory Review Group, public sector bodies, business stakeholders (including both business organisations and individual businesses as relevant), and consumers. Other stakeholders may be relevant for specific polices or regulations, for example the third sector, academic experts, or other representative groups.

Officials should consider the most appropriate mechanism for engaging each stakeholder – for example, small businesses may have limited resources and time and be unable to respond to detailed public consultation. This includes considering how engagement is done in a way that maximises the opportunity for relevant stakeholders to participate, including harder to reach groups. Engagement should also be done in a way that is inclusive, with any communications done in a way that is accessible and that allows stakeholders to understand what is being asked of them.

The New Deal for Business Group recommendations and Business Engagement Principles recommends that business stakeholders should be engaged as early as possible to ensure that the broadest range of feedback and options are considered. Similarly, the Verity House agreement should be considered when approaching public sector agreement and specifically around possible enforcement/ compliance options to be delivered by Local Authorities.

Officials should consider which businesses/ sectors they are engaging with and any existing guidance covering such engagement. For example, the Scottish Government is a party to the World Health Organisation's Framework Convention on Tobacco Control, specifically Article 5.3. This means that we take our obligation to protect the development of public health policy and tobacco control generally from the vested interests of the tobacco industry seriously. When considering policy in these areas, stakeholders being engaged should be asked to declare any direct or indirect links to, or funding received from, the tobacco industry.

While every effort should be made to avoid face to face meetings with the tobacco industry, on rare occasions a meeting may need to be held. An example may be a meeting to enable effective regulation of the tobacco industry and tobacco products. When deciding whether to meet with the tobacco industry, officials should consider a range of questions including, but not limited to, the following.

• What is the role of the tobacco industry or representative in the meeting?
• What is the government's role at the meeting?
• Who is involved in organising the meeting?
• Who is providing funding for the meeting?
• Who is attending the meeting?
• Where is the meeting being held?
• What is the scope for informal, unstructured engagement with the tobacco industry, and how can this be avoided?
• How could the interaction be perceived by other external stakeholders?
• How can transparency be maintained throughout the meeting?

Before such a meeting, a clear agenda should be set, and no other items of business should be discussed other than those agreed in the agenda. When opening the meeting, the chair should remind attendees of the government's article 5.3 obligations and should stop the meeting if these obligations are breached. Minutes should be recorded and published online.

Internal SG Engagement/ Engagement with wider Public Sector

Internal SG engagement

In developing policy, officials should look to engage as early as possible with colleagues in other areas of SG that may have an interest in the affected sectors or be impacted by the policy proposals. They should seek to understand what other policy development is ongoing that may interact with the options being considered. Working together on policy development allows officials to deliver more effectively and efficiently, and can present a single aligned approach to businesses. It avoids contradictory policy decisions that work against each other, reduces the likelihood of insufficient resources being available to deliver (both internally and within stakeholders), and reduces the risk of resistance among stakeholders caused by overload.

This cumulative impact of policy is important to consider in line with the New Deal for Business approach. The impacts of single policies on business can be significant without considering the total impact of multiple new requirements and the timing of implementation of various changes.

SG officials in relevant areas will be able to provide advice on specific sections of the BRIA, for example the Internal Market, International Trade and EU alignment sections. In particular officials should ensure that they have engaged with DITI on investment. The Investment Strategy and Delivery Unit should be engaged to consider the impacts on private capital investment attraction into Scotland, and the Inward Investment Policy Unit should be engaged to consider the impacts on foreign direct investment and inward investment into Scotland.

As part of this engagement, officials are encouraged to discuss the proposed options with the Regulatory Review Group. This is an independent group put in place to provide advice to officials and Ministers on regulatory options and associated implementation. They can advise on workable solutions to the agreed issue – for example whether voluntary regulation would be a reasonable approach to the problem, and the implications of each from an implementation and impact perspective. The RRG is supported by Scottish Government officials through a secretariat function and is not a replacement for external discussion. Early engagement with the RRG to screen the proposal is recommended and Ministers may ask to formally refer the policy proposal to them as part of the evidence gathering and decision-making process.

UK/ Devolved Administrations

Beyond SG, it is important to consider UK Government and other devolved administrations.

Officials should set out how they have engaged with those administrations to understand where there are parallel or contradictory policy measures taking place. When considering options, it will be important to consider what level of alignment is best for the policy outcomes. Differences from other parts of the UK may be appropriate on policy grounds, where different outcomes are being targeted. However, it should be recognised that it will be more difficult for businesses that operate across the UK where they are subject to different requirements across administrations.

Aligning policy proposals may provide benefits in strengthening the messaging and effectiveness of policy interventions. It can also make it easier to implement and for businesses to comply. This can help more effectively meet the desired outcomes while reducing the costs/ impacts on business.

Engaging with other administrations can help officials understand the impacts of policy, where work has already been undertaken (noting the application to Scotland may differ) as well as considering international approaches. Lessons learned from development/ implementation should be considered where these may benefit the approaches being taken by SG.

Officials are expected to consider and set out possible Internal Market implications in the relevant section of the BRIA below.

Wider Public Sector

Engagement with other parts of the public sector is also key to ensure the impact of a policy/ regulation is as effective as possible. In Scotland, Local Authorities (and COSLA as their representative) will be key stakeholders, but other public bodies may also have interest. Local Authority regulators can also be engaged through the Society of Chief Officers of Trading Standards in Scotland and the Society of Chief Officers of Environmental Health in Scotland.

Where there will be compliance/ enforcement responsibilities, officials should identify as early as viable options for where these could sit. This may be an existing regulatory body (for example Local Authority Environmental Health/ Trading Standards, Police Scotland etc.). Officials should be cognisant of the existing requirements on regulators when adding further requirements and ensure these bodies have been engaged to understand the practical options and implications. These can be set out in the relevant section below.

Other public bodies will be able to provide feedback on aspects of the costs, investment outcomes and wider impacts/ benefits for business. The enterprise agencies (Scottish Enterprise/Scottish Development International, Highlands and Islands Enterprise and South of Scotland Enterprise) will be important, but other organisations such as the Scottish National Investment Bank and Scottish Futures Trust may be able to provide feedback on policy.

International

Engagement with government organisations in other countries can be important if trade of specific countries with Scotland may be affected by the policy proposals.

Policy makers in foreign governments who are planning or may have implemented similar regulations can be a good source of advice and good practice and international regulatory cooperation should be considered as a useful tool in policy development.

Business Engagement

In December 2021, the Scottish Government published a Business Principles Agreement establishing an overarching framework for working constructively with business. The Agreement, based on trust and mutual respect, sets out a shared commitment to co-development, collaborative delivery and collective assessment of all policy impacting on business.

As part of the Impact Assessment, officials should set out how they are engaging with businesses, their representative organisations and the third sector to gather feedback and help identify the impacts form the options under consideration. Officials should also set out what future engagement is planned.

Businesses must be engaged as early as possible in a meaningful way. Understanding and setting out the impact cannot effectively be done without engaging with business. Where international trade is likely to be affected by any proposed regulations, SG is obliged under international agreements to include affected businesses abroad in this engagement.

Officials should detail what business engagement has been undertaken and what is planned, setting out who has been involved and any key feedback that has been provided. When describing the engagement with business, it should be clear what information and which options have been presented to them.

The Scottish Government agreed Business Engagement Principles with business to guide engagement. We are also committed to the New Deal for Business Group's recommendations on improving how it engages with businesses. Key considerations will be:

• Engage with a broad base of businesses – A minimum expectation is that officials should engage with 6 – 12 businesses, as well as any engagement with business organisations. Engaging with more businesses will provide more feedback, helping improve the policy development further, and this minimum will not be enough in many cases to gather sufficient information. Officials should consider what engagement will be necessary to get adequate feedback. In particular officials should ensure they engage with sufficient businesses representing different economy sectors (including a sufficient number of small businesses) to get appropriate feedback and ensure sufficient understanding of the impacts.
• Engage as early as possible – Engaging with business and their representative organisations as early as possible ensures that there is sufficient time for policy to be developed based on feedback. It also avoids negative impacts and reputational damage when businesses learn about policy via other routes.
• Engage flexibly across channels – In person meetings provide valuable feedback and help positively display engagement. However, it may be challenging for some businesses to engage in these meetings, and so officials should look for other ways to gather feedback.

When engaging with businesses, officials should ensure they engage across all relevant sectors that may be impacted by the policy/ regulations. They must also ensure they have adequately consulted to understand the impact on small businesses. Given the limited resources available to some of these organisations, it will be important to make engagement as easy and worthwhile as possible for them.

When planning engagement, officials should ensure they consider

• business capacity to engage – individual businesses will engage with the Scottish Government in addition to "the day job" and being considerate and respectful of their time is crucial. This applies to many of the business representative organisations who are small businesses.
• respect business stakeholder time – think about the best time to engage once you have a basic idea of a policy initiative to set out early thinking and seek ideas on impact. Keep engagement meetings short and focused and allow plenty of notice for early engagement. Consider what other policies are being developed at a similar time that could be linked to your policy.
• commercial sensitivity – some subject matters may mean some businesses will consider the feedback or experience they offer to be commercially sensitive. In these circumstances smaller groups or one to one engagement may be preferable.
• stakeholder comfort – small business owners who are not used to participating in roundtables with large groups may feel uncomfortable and unable to get their points across in such settings

Where individual businesses have been engaged with directly, it is helpful to set out numbers, names where appropriate, size, sector, and locations along with what form the engagement took.

Annexes can be used to share more detailed feedback/ results of engagement.

Public Consultation

Public consultation can provide a valuable source of feedback on policy, particularly for significant policy proposals/ planned regulations. Under the UK-EU TCA the Scottish Government also has obligations in regards carrying out public consultations. It is not a specific part of the BRIA process, but where it is being or has been undertaken the details can be set out here. This should include a summary of what options were presented as part of the consultation. Partial BRIAs should be provided alongside consultations to demonstrate current Scottish Government understanding of potential impacts.

Where public consultation has provided feedback on the consequences for businesses, this should be factored into the costs/ benefits set out below. Wider comments not relevant to this assessment do not need to be included (but may be relevant for the wider set of Impact Assessments).

While consultations are useful, it is still expected officials undertake direct engagement with business or their representative organisations as set out above. Due to competing resource demands, small businesses or individuals may struggle to engage with written consultation. To help with this, consultations should be clear, jargon-free and focussed.

Other Stakeholders

Officials will likely engage with groups not covered by the sections above. This may include (but not limited to) Trade Unions, other third sector organisations, academics or representative bodies who have views on policies or regulation. Details of those who have been engaged and that have provided feedback relevant for the BRIA should be set out here.