Recent initiatives at EU level in support of ex ante social impact assessment

1. Recent initiatives at EU level in support of ex ante social impact assessment Peter Lelie – Policy Officer DG Employment, Social Affairs and Equal Opportunities European Commission Conference on Poverty Impact Assessment – Luxembourg – 27 April 2010

2. In recent years ex ante social impact assessment has increasingly come to the fore within the Social Open Method of Coordination, the reference process for European cooperation and coordination in the area of social protection and social inclusion. • Commission Communication July 2008 on Reinforcing the Social OMC: Strengthening the positive interaction with other EU policies / Mainstreaming: “The Commission will pursue its own efforts to produce robust impact assessments on each new policy initiative, and in this context pay particular attention to social impacts. The Social Protection Committee has already paid increasing attention to mainstreaming of social objectives, also drawing on the specific experience already gained in the EU on gender mainstreaming. The Commission will further work with the Social Protection Committee in order to strengthen the shared impact assessment capacity.’ 2

3. Joint Report on Social Protection and Social Inclusion 2009 “Increased attention should be given to the quality and continuity of stakeholder involvement and to the mainstreaming of social considerations inter alia via the evaluation of social impacts as a vital part of integrated impact assessments”. - Joint Report on Social Protection and Social Inclusion 2010 “Given that pressure aimed at limiting public expenditures is to be expected in most of the Member States in the coming years, the development of an adequate ex ante social impact assessment capacity in the context of integrated impact assessment arrangements should be encouraged. Strengthening such 'social' component can contribute to more effective and efficient social policy measures. Applied to non social policy measures, it can contribute to avoiding unintended negative social impacts and to better exploiting possibilities for positive synergies (mainstreaming). In this respect, the Social OMC can be used as a forum for exchanging know how between the Member States and between the Member States and the European Commission. The latter has recently taken initiatives to strengthen its own capacity to assess social impacts.” 3

4. - The principle of ‘good governance’ is part of the common objectives of the Social OMC (agreed by all Member States). Social protection and inclusion policy should be: - integrated (need for strategic approach, ‘mainstreaming’); - based on facts (evidence based policy, policy evaluation); - involve stakeholders. • Ex ante social impact assessment seems an interesting ‘technique’ that can promote progress related to these objectives. • The need for ex ante social impact assessment, also of non social policies is increasingly emphasized as it becomes clear that 10 years of Lisbon strategy have led to insufficient progress on social protection and inclusion. Economic growth and employment policies do not automatically bring substantial progress in this area. • At EU level, support for the principle of ex ante social impact assessment can be found in the horizontal social clause of the new Lisbon treaty.

5. Paradox If ex ante social impact assessment is such a great idea in principle, why isn’t it done more and why is there so little enthusiasm about its implementation in practice? Building on the ‘mandate’ that was just described, two initiatives have been taken to promote ex ante social impact assessment in the EU Member States: - A study on social impact assessment as a tool for mainstreaming social protection and social inclusion concerns in public policy in the EU Member States was commissioned at the start of 2008. - A peer review on social impact assessment was held in Bratislava (Slovakia) in October 2008. 5

6. - The peer review was held in Bratislava at the occasion of the launch of a new integrated impact assessment system in Slovakia (pilot stage). • The seminar, in which seven Member States and two EU stakeholder networks participated, was intended as a first general discussion of the issue. • The peer review results are well documented. See: • http://www.peer-review-social-inclusion.eu/peer-reviews/2008/social-impact-assessment . • - The study was launched approximately at the time the peer review was organized. It was intended to draw up a detailed state of play with regard to the practice of ex ante social impact assessment in the EU Member States at national and regional level.

7. The study was awarded to a consortium of the Evaluation Partnership and the Centre for European Policy Studies (CEPS). It runs from October 2008 to April 2010 (it is currently being finalized). • It should lead to recommendations on how ex ante social impact assessment in the Member States can be promoted, based on three research stages: - A mapping of social impact assessment systems in the 27 Member States of the European Union (panorama); - A detailed analysis of ten well developed or especially interesting systems; - A detailed analysis of a set (+/- 50) of ex ante social impact assessments. - What follows is an overview of a number of tentative conclusions that can be drawn on the basis of provisional results. The final results will be published in the near future.

8. Definition of ex ante social impact assessment In the study, ex ante impact assessment is understood as ‘the formal analysis of the potential effects of new policies before their adoption’. As far as the definition of ‘social’ is concerned, the classification used in the Commission’s integrated ex ante impact assessment system (before the recent reform) was used as point of departure: - employment and labour markets; - standards and rights related to job quality; - social inclusion and protection of particular groups; - equality of treatment and opportunities, non discrimination; - private and family life, personal data; - ‘governance’, participation, good administration, access to justice, media and ethics; - public health and safety; - crime, terrorism and security; - access to and effects on social protection, health and educational systems. 8

9. An initially positive picture… From the mapping stage of the study one can conclude that at the end of 2009 21 of the 27 Member States had some kind of integrated ex ante impact assessment system in place, while 5 Member States had specific (non integrated) ex ante impact assessment systems. In at least 8 Member States some kind of integrated impact assessment system was found at the regional level. 25 Member States had some kind of ex ante social impact assessment system (not BG and LU), which means that they were assumed to assess at least one aspect of social impact (definition EU Commission). It quickly became clear that the study was not going to be easy: - Systems have often been set up only recently and they are still being developed (moving target). - There is little transparency and the systems come in many shapes. They are embedded in the political-administrative setting of the Member State / region. - It is difficult to see the reality through the theory. 9

10. The mapping exercise has shown that ex ante social impact assessment can be found in three basic forms: - as a component of an integrated impact assessment system; - as a specific impact assessment test; - as a combination of an integrated impact assessment system and one or more specific impact assessment tests. - In the framework of integrated systems, typically the economic, social and environmental impact of measures is assessed: - Regulatory Impact Assessment (RIA) - Sustainable Development Impact Assessment - A few examples of specific social impact assessment tests: - Equality Impact Assessment (UK, NI…) - Gender Impact Assessment (DK, NL…) - Poverty Impact Assessment (IE…) - Youth Impact Assessment (FL…) - Income Effects Test (NL…) - Human Rights Impact Assessment (UK) - Rural proofing (UK, IE, NI…)

11. - Equality Impact Assessment: a few examples of criteria used: - Gender - Age - Disability - Ethnicity/race - Cultural or linguistic minorities - Religious belief - Political opinion - Sexual orientation - Marital status - Family / dependency status - Unemployment - Homelessness - Rural communities - Ex ante social impact assessment is sometimes mandatory, sometimes voluntary. 11

12. - The following systems have been examined in detail: - Integrated Impact Assessment: CZ, PL, FI, IT - Specific Impact Assessment tests: NL, DK - Combination of integrated Impact Assessment and (a) specific test(s): IE, UK, NI, FL - It was concluded that not all systems show the same degree of internal and external orientation. The Dutch and Danish systems seem to be more internally focused, intended to improve decision making within the administration (less aimed at external transparency, accountability).

13. Overview of the impact assessments that were examined 13

14. Integrated impact assessments (1) • Culture, education and youth FI Government proposition to Parliament proposing a change to law on basic education FL Final exam of foreign languages for secondary education and development objectives of Dutch for newcomers UK Apprenticeship, skills, children and learning bill  • Economy, finance and tax FI Government proposition to Parliament proposing changes to vehicle taxes NI Northern Ireland Executive Review of the Domestic Rating System • Employment and social rights CZ Amendment to the Law 108/2006 on social services IE Regulatory Impact Assessment: Implementation of proposals on trusteeships – Social Welfare and Pensions Bill 2008 PL Proposed legislation on state support to newly unemployed / to support mortgage payments PL Proposed legislation on the extent of family benefits PL Proposed legislation on bridging pensions / early retirement UK Welfare Reform Bill UK Child Poverty Bill UK Child Support Collection and Enforcement. Amendment Regulations 2009 NI Addressing the Economic Downturn: The Case for Increased Investment in Social Housing

15. Integrated impact assessments (2) • Energy and natural resources CZ Assessment of goal- achievement and social impact of the implementation of the State Energy Strategy FI Climate and Energy Strategy for the Long Term UK Climate Change Act • Environment, consumers and health FL RIA on the access to building for disabled people IE Regulatory Impact Assessment: Revisions of the Standards Regulations Applying to the Private Rented Sector • Justice and citizens' rights CZ The final report on RIA for the white paper on free legal assistance

16. Equality impact assessments • Culture, education and youth UK Play Strategy • Employment and social rights NI Equality Impact Assessment of the Pensions Bill • Environment, consumers and health UK Cancer Reform Strategy Equality IA UK A Better Deal for Consumers: Delivering Real Help Now and Change for the Future • Justice and citizens' rights NI Equality Impact Assessment of a Policy on the arrangements for the delivery of support services to victims of crime (core funding of Victims Support NI)

17. Other types of social impact assessment Poverty Impact assessment • Economy, finance and tax IE Analysis of Poverty Impact of Budget 2009 IE Poverty Impact Assessment of Budget 2009 income tax measures • Employment and social rights IE Poverty Impact Assessment of One Parent Family Payment Youth Impact assessment • Transport and travel FL Child IA on the draft legislative measure on accommodations and organisations in the field of tourism/ Toerisme voor Allen Income impact assessment • Economy, finance and tax NL Reform of tax credit for the chronically ill

18. General picture: far from positive, but there is a basis to build on… • Ex ante social impact assessment is not well developed in the Member States (more theory than reality). In the existing integrated impact assessment systems the assessment of economic / administrative burden and budgetary impact dominates. Specific impact tests are often voluntary and seem to have little impact on policy making. • Most attention is paid to the obvious direct social benefits of policies. Less attention is paid to indirect social benefits and direct and indirect (unintended) social costs. • Especially the third stage of the study (analysis of impact assessments) showed that: - far fewer impact assesments with social content could be found than had originally been hoped for (long list was eventually limited to approx. 80 examples); - where the original intention was to focus on social impact assessments of ‘Lisbon’ policies (economic- and employment policies) mostly social impact assessments of social policies were found. - Nevertheless, the study has pointed to a number of good practices and critical success factors could be identified. 18

19. Aims of ex ante social impact assessment Interviews with producers and users of social impact assessments have allowed to distinguish different reasons why assessments are done: 1. It is done simply because it is mandatory to do the assessment; 2. The impact assessment is used to selectively defend a specific political decision; 3. The impact assessment is used to explain why a certain policy option was preferred to others (transparency); 4. There is a real intention to acquire new knowledge, to choose the right policy option, to improve the proposed policy; Sometimes the assessment is done too late in the policy process so that it cannot possibly have an immediate impact, but it can influence policy in the longer run (later decisions). It is difficult to demonstrate that a specific ex ante impact assessment has contributed to better policy. 19

20. Definition of social impact • There is no general consensus on what should be understood as ‘social impact’. This must be clarified in the guidelines, certainly when social impact assessment is new and producers are used to focusing on economic and budgetary impact. It appears that only seldom external social policy expertise is used (academics, consultants). • Some systems are very prescriptive, while others remain very general or only provide some examples of social impacts. It seems, however, that the level of detail of the guidelines per se is not correlated to the quality of the impact assessments. Rigid, very prescriptive systems that provide long checklists can put people off and lead to routine box ticking. A compromise seems most indicated (some detail but not too much). • In the course of the study the team has had to develop its own definition of social impacts. Impacts are not always ‘labelled’ in the same way by everybody (e.g. employment effects are sometimes considered to be economic impacts / health effects are sometimes considered to be environmental impacts). 20

21. Social impact assessment as part of an integrated impact assessment system or as a separate test - If the aim is to mainstream social objectives in general policy it seems better to integrate social impact assessment in integrated impact assessment, but one should try to avoid that the social impact component is excessively overshadowed by the other components. • Separate, specific social impact tests will ensure that social impacts are more thoroughly examined, but tend to have a limited impact on the decision making process. Such tests are often voluntary. When they are mandatory they are sometimes done in a superficial manner. • A trend of increasing integration of ex ante impact assessment can be observed. 21

22. Proportionality of the analysis • The level of detail of the analysis should be proportionate to the likelihood and the intensity of the expected impacts. • In several systems a two step process has been developed in which an initial screening has to provide guidance on whether a (more) thorough analysis is needed. • An adequatefirst step analysis is very important. • Provisions with respect to quality assurance should be put in place to assess decisions taken in this respect. 22

23. Consultation as part of the impact assessment process • Consultation of stakeholders can lead to better quality impact assessments. NGO’s, social partners a.o. are in close contact with social reality. They can also contribute to quality assurance. Transparency of the impact assessment process is important. • Consultation is often part of impact assessment but it can take different shapes, also depending on the political-administrative culture (e.g. formal open consultation (via the internet), through advisory councils or informal consultation). In some countries consultation standards apply (codes). • Consultation is likely to have a bigger impact when it takes place early on in the assessment process and when it is done on the basis of an early version of the impact assessment (rather than on the policy proposal itself). • Expectations on both sides (impact assessment producer and consulted) have to be matched. 23

24. The problem of the quantification of social impacts • Integrated impact assessment systems are often quantificationor monetisation oriented (cost benefit analysis). • It is not always self evident how social impacts (other than direct income and employment effects) can be quantified. In the case of social policy short term costs are often immediately visible, while benefits often only become visible in the longer term and are difficult or even impossible to quantify. • It is a challenge to try and quantify social impacts as much as possible (this implies the development of data sources, models etc..), but there should also be room for the use of good qualitative research. Certain methods allow systematic consideration of qualitative information. - Social impact assessments should go further than just mentioning social impacts without any substantiation. 24

25. Other preconditions… • a political and administrativeculture that considers policy evaluation and ex ante impact assessment as an added value, not as an administrative burden. • political will to make social impact a priority. Producers have to experience that social impact assessment is valued and that quality of the assessments is screened. • technical capacity for social impact assessment is needed: databases, methods and models, analytical capacity. This implies adequate guidelines, toolboxes, ad hoc support, training. • an adequate impact assessment process: impact assessment has to be done early in the decision making process. • From the perspective of quality assurance it is important that ex ante social impact assessment is followedby ex post evaluation. 25

26. Next steps… • It seems indicated to start and support a process of mutual learning on this issue between Member States (and regions). • From the EU level support could be provided in case there is an interest to put in place a new or improve an existing social impact assessment systeem. • Such a system will only work if it is adapted to the specific political-administrative setting (no ‘one size fits all’). • After the study will have been finalized a library of ex ante social impact assessment guidelines and impact assessments will be available for further reference. • Maybe in the future thematic toolkits could be developed that indicate possibly relevant social impacts of specific policies, pointing to databases, instruments, models, examples… • Links could be created with new developments regarding the assessment of social impact within the Commission’s integrated impact assessment system. 26

27. Initiatives by the European Commission in support of ex ante social impact assessment at EU level • Study: Assessing the employment and social impacts of selected strategic Commission policies (ECORYS) January 2009 http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=485 • Study: Review of methodologies applied for the assessment of employment and social impacts (ECORYS-IZA) (publication planned in the near future) • Guidance for assessing social impacts within the Commission Impact Assessment system http://ec.europa.eu/social/BlobServlet?docId=4215&langId=en • Impact assessment system of the European Commission: http://ec.europa.eu/governance/impact/index_en.htm 27

28. Thank you for your attention peter.lelie@ec.europa.eu For more information on the Sociale Open Method of Coordination: http://ec.europa.eu/social/main.jsp?langId=en&catId=750