Regulatory Policy Committee finds original impact assessment for Renters (Reform) Bill was ‘not fit for purpose’

Independent watchdog accepts that further material from the DLUHC has now provided clarity on the impacts of the Bill, but says there is still room for further improvement

The original impact assessment (IA) for the Renters (Reform) Bill was not fit for purpose, the Regulatory Policy Committee (RPC) has said.

In an opinion published yesterday, the Committee – that describes itself as the independent better regulation watchdog – says that the impact assessment as originally submitted by the Department for Levelling Up, Housing and Communities (DLUHC) for scrutiny on 24 March 2023 –

‘… was not fit for purpose as it had not correctly classified (or provided appropriate justification) for some business impacts.’

In particular, the Committee highlights that the Department –

• had not clearly identified what measures were being enacted through the Bill itself and what would necessitate further secondary legislation;
• failed to ensure that the IA truly reflected the content of the Bill;
• had not considered the full range of likely impacts on landlords in the private rented sector, as well as the stock of housing that the sector contains; and
• made use of unjustified assumptions which were unsupported by evidence.

However, the Committee goes on to confirm that it has now given the revised IA a ‘green rating’ of fit for purpose – based on new information provided by the DLUHC on the assessment of impacts of measures enacted through the Bill, measures that will require future secondary legislation, and impacts on small and micro business (SMB) landlords.

Despite this green rating however, the RPC says that the IA could be further improved, and as a result recommends that the Department should –

• undertake further quantitative consideration of potential mitigation for any SMB landlords disproportionately impacted, as well as considering the impacts faced by medium-sized businesses;
• address the lack of a suitable quantitative analysis of the, potentially very substantial, broader impacts on landlords and the private rented sector market due to the reforms;
• provide a better explanation for the assumptions relating to familiarisation costs for landlords, and improve the assessment of specific impacts faced by the most affected landlords rather than focusing primarily on average impacts across all those in the private rented sector; and
• strengthen the assessment of the wider impacts on those with protected characteristics (both tenants and landlords) – in particular, by looking at whether the reforms will introduce additional barriers to entry for new landlords and whether they will restrict investment into the private rented sector and impact on future supply.

The RPC Opinion: Renters (Reform) Bill is available from gov.uk