Scottish Firms Impact Test
The options section of the toolkit stresses the need to consider the impact on different sectors and groups and to work with stakeholders to validate assumptions –particularly businesses. This section of the toolkit addresses the key challenge of thinking and gathering evidence about the impact on specific industries, firm types and businesses of different sizes.
- Will it have an impact on the competitiveness of Scottish companies within the UK, or elsewhere in Europe or the rest of the world?
- How many businesses and what sectors is it likely to impact on?
- What is the likely cost or benefit to business?
In assessing business impact you should:
- remember that many business sectors have representative organisations, e.g. Scottish Financial Enterprise, Scottish Engineering, Scottish Manufacturing Advisory Service, and will be willing to help you complete your BRIA. A range of other business organisations may also have an interest, including CBI (Scotland), the Federation of Small Business (Scotland), the Scottish Chambers of Commerce, the Institute of Directors (Scotland), and the Scottish Council Development Industry.
- Make clear where impacts will or could be different for different parts of an industry, (e.g. banks and building societies, rather than financial advisers), or different parts of a supply chain (e.g. manufacturers, rather than wholesalers or retailers).
- Always consult the STUC and/or relevant trade unions.
- SIC codes (or ‘Standard Industrial Classification’ codes) are a widely recognised means of classifying business establishments by their type of economic activity. By using these codes you can ensure clarity. An index of the SIC codes can be found here.
However, a core element of the BRIA approach is that you should identify, visit and consult 6-12 businesses – of varying sizes and sectors as appropriate likely to be affected by the policy proposals being developed in order to quality assure any separate assessment of what the likely cost or benefit to business will be. Engagement with companies should be face to face and officials should visit the company wherever possible. In broad terms each visit will involve discussing what the legislation might or will do and what that might mean to the business. With each business work out the impact and cost to the business both in monetary and other terms.
Impact on small businesses
You must look in particular at the impact on micro and small businesses. The assessment of the impact on small business should therefore include consideration of the following issues:
- the variation in the regulatory burden between a self-employed, micro, small, medium and a large business;
- whether compliance flexibility options could assist a micro, small, medium business to meet the requirements of the proposal;
- the distribution of benefits of the proposal between a self-employed, micro, small, medium business;
- the extent of compliance by a self-employed, micro, small, or medium business versus large business; and
- the relative impact on a self-employed, micro, small, or medium business of penalties for non-compliance – for example, by expressing costs as a percentage of turnover.
Support with engaging relevant businesses
The independent Regulatory Review Group (RRG) recommended this broad approach to Ministers and members have agreed to provide advice and support exceptionally where there is uncertainty about whether there will be an impact on business or difficulty accessing an appropriate range or number of business contacts.
Please contact the Better Regulation team if you think you need this support at BetterRegulation@gov.scot
Email: Fraser Reid