Cost-benefit Analysis: An Alternative Approach

Compliance Cost Assessment (CCA) is neither the first nor the only technique used within UK central government to assess the impact of proposed regulation. Most notably, the approach with which we compared CCA in Chapter 2, cost-benefit analysis (CBA), is widely used and in this chapter we focus on the operation of this technique by the Health and Safety Executive (HSE). The adoption and impact of CBA is of interest in three ways. First, the choice of CBA by the HSE provides an insight into the nature of health and safety regulation, reinforcing the observation which arises from all the case studies about the diversity of regulatory policy in the UK. Second, the way that CBAs are produced, and subsequently incorporated into both the relevant regulatory process and the more general requirement to produce a CCA, gives an interesting contrast to CCA. Finally, CBA is clearly relevant to the development of CCA as part of Regulatory Appraisal. While much of this chapter relates specifically to the use of the technique by the HSE, many of the problems encountered would be common to any wider application.