As individuals, business owners or employees, we are all affected by public policies. For businesses, staying informed about government policy and being able to meaningfully contribute to and help shape government decision making is a key part of a well-functioning economy. There are different approaches to doing this, with most businesses often exploring a handful in parallel.
The most common route that businesses take is as a group, using their collective voice to make the case for change. This usually happens through a business or trade association, like the policy activities of the CBI itself. This enables their voice to be amplified to achieve cut-through on specific issues using one main channel with government departments.
There are alternatives to this approach, when looking at firm or sector specific issues, where the business community as whole may not have clear views or where a business may want to explore other options. In these scenarios, transparent and evidence led analysis can often be a powerful tool by which you can constructively engage with government departments. This takes many forms but at a high level, it can consist of:
- Evaluations and impact assessments: assessing the impact of a policy or piece of regulation, including the cost of administration and compliance, potential behavioural changes, and economic impact.
- Economic contribution analysis: demonstrating the economic contribution of a business or businesses in an area of the economy and highlight the economic output, jobs, and taxes that they are directly and indirectly providing.
- Tax and fiscal impact assessments: assessing the revenue and/or cost implications of a change in a policy or the introduction of a new policy.
- Cost benefit analysis: calculating the positives and negatives of a project or policy to decide between competing project or policy actions.
- Literature reviews and international benchmarking: using existing evidence and literature from academic research and from international examples to build a case for or against a specific course of action.
Across these five areas, there are well-established methods to carry out analysis. These methods are used by government in their own internal assessments, with the guidance often made public. External analysis can often have a greater impact when presented in the same language used by the government and carried out using a similar approach.
CBI Economics can support businesses in this space. For example, by applying the Green Book guidance, published by HM Treasury, to deliver evaluations and impact assessments on policies. Or if business seeks to highlight its contribution to the economy, in which case a common approach for economic contribution analysis could be applied. This would involve input-output analysis, which looks at the economic relationship between a business or sector, its supply chains, and imports and exports, to provide an overall view of the impact that business or a sector has on the wider economy.
CBI Economics is one of a number of organisations that can help develop the evidence base necessary to argue for or against changes in policy. However, in our experience, what is often missing is a lack of understanding of the government machinery to then take that forward and have productive discussions with the appropriate government department. This is where knowledge of well-established analytical methods, along with experience of working with and in government can be valuable and lead to a bigger impact.
We have been involved in helping clients build an evidence base for change and helping to facilitate discussions with the stakeholders within government departments, allowing them to build those networks and take the conversation forward.
If you have a project or idea in mind and you would like to discuss it with us, you can contact us on: CBIeconomics@cbi.org.uk
Learn more about CBI Economics services here.