The Real Impact of Regulations on
Growth
A PROPOSAL PREPARED FOR BIS
December 2011
© Frontier Economics Ltd, London.
Confidential
December 2011 | Frontier Economics
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The Real Impact of Regulations on
Growth
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Introduction
1
1.1
Why Frontier? ............................................................................ 1
1.2
Proposal outline ......................................................................... 2
2
Our understanding of your requirements
3
3
Methodology
5
3.1
Overview .................................................................................... 5
3.2
Objective 1 – Comprehensive list............................................... 5
3.3
Objective 2 – Theoretical mechanisms ...................................... 7
Objective 3 – Empirical evidence.......................................................... 8
3.4
Objective 4 – Creating new markets ........................................ 11
3.5
Objective 5 – Alternatives to regulation .................................... 12
3.6
Draft report ............................................................................... 13
3.7
Final report ............................................................................... 14
3.8
Final presentation .................................................................... 14
3.9
Project management ................................................................ 14
4
Team
15
5
Our experience and capabilities
19
6
Quality Assurance
23
7
Pricing Schedule
25
Annex 1 – Insurance Documents
27
Annex 2 – Statement of Non-Collusion
29
Annex 3 – Form of Tender
31
Annex 4 – CVs
33
Contents
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The Real Impact of Regulations on
Growth
Figure 1. Overview of methodology
5
Figure 2. Indicative summary table of empirical analysis1
10
Figure 3. Team overview
15
Figure 4: Pricing schedule
25
Tables & Figures
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Introduction
1.1
Why Frontier?
December 2011 | Frontier Economics
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We understand that the purpose of the project is to enable BIS to develop a good
understanding of the particular channels through which regulatory changes can
have an impact on growth. BIS would also like to understand the ways in which
regulation can influence future markets in a positive way and how non-regulatory
routes can support growth. The information on each of these issues is to be
carried out by means of a literature review.
We have selected a small team of experienced economists to complete this
project efficiently. Our team includes Professor Nicholas Crafts, a well-known
academic expert in understanding the determinants of growth and the role
regulations plays in supporting and constraining growth. He is the author of
‘Regulation and Productivity Performance’ (2006, Oxford Review of Economic
Policy, vol. 22 no. 2.)
We think it is essential that the literature review is:



Comprehensive – our team’s experience in conducting literature reviews
and having Professor Nicholas Crafts as one of our team members will
ensure that the literature review will cover the full spectrum of relevant
research. We have developed an approach based on our experience
elsewhere to ensure that the relevant peer reviewed papers, working papers,
and appropriate grey literature are covered.
Based on critical analysis – the main findings from the literature review
must be based on a critical analysis. We will identify the strengths and
weaknesses in methodologies and data analysis within each of the sources.
We put forward a team of experienced economists that can help bring out
from the literature the more robust analytical concepts, econometrics as well
as the interpretation of the results.
Accessible to a wide audience – we will aim to deliver helpful and useful
narratives from the critical review. The final report and presentation will
communicate our findings in a clear and accessible manner. Our
combination of robust economic analysis combined with the ability to apply
it quickly and to provide clear answers to policy makers characterises our
work.
Introduction
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Proposal outline
Our proposal is structured as follows:

Section 2 provides our understanding of the research requirement;

Section 3 provides our methodology;

Section 4 presents our project team,

Section 5 provides our relevant experience

Section 6 details our quality assurance processes;

Section 7 provides our proposed fee and pricing schedule.
Details of our insurances are included in Annex 1. Our Statement of noncollusion is contained in Annex 2. Annex 3 provides our Statement of tender.
Detailed CVs for each of the team members are provided in Annex 4.
Introduction
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Our understanding of your requirements
The Coalition Government have clearly put growth high up on the political
agenda and are introducing a broad range of measures to stimulate growth. In
this context it makes sense to understand whether there are regulations that place
too great a drag on growth, and to what extent.
The main aim of this study is to gain a greater economic understanding of the
ways regulation can hamper growth, and to develop some insight into the
magnitude of this potential drag on the economy. BIS would also like to
understand what evidence there is of regulation having a positive impact on
growth by influencing the development of new markets, and where alternatives
to regulation may have more positive consequences for growth.
There is a plethora of different types of regulation aimed at different policy goals
and designed in different ways. In most cases there will be an economic rationale
for regulation and this ought to be based on evidence of a material market
failure. It follows that if the regulations are effective they will yield benefits for
the economy in economic welfare terms. But it is well understood that
regulations will create burdens; and the greater weight of these burdens will be on
business. There is a legitimate concern that such regulatory burdens are having a
significant impact on productive efficiency and hence on growth.
A standard public economics analysis of regulations will tend to concentrate on
the size of the market failures that are being addressed by a regulation and
compare these with the likely economic burdens of regulation in terms of
compliance costs to business and non-desirable market distortions. A wider
economic perspective will add to this analysis by questioning such things as:

whether those implementing the regulations face incentives that can
lead to less effective regulation;

whether businesses affected by regulation can game them to create
incumbent advantages; and

whether dynamic effects such as ‘creative destruction’ can be slowed
down by regulation.
In this proposal we set out how we would go about this study. Our broad
approach has been based on ideas we have gathered from a brief analysis of some
of the main published articles on the relation between regulation and economic
performance. There appears to be two ways we can consider the regulation and
economic growth relationship:

Firstly, there is the approach which looks like the norm in the literature,
where a relatively standard growth model is put forward and this is adapted
to include one or a number of indicators of regulatory burden. Estimates of
Our understanding of your requirements
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regulatory impacts are provided using regressions based on cross-country
data. There is relatively little theoretical foundation to the studies and is it
not obvious how the analysis can be applied in a policy context.
Nonetheless, some indication of the magnitude of regulatory burdens on
growth and in some cases the impact of certain types of regulation can be
understood.

Secondly, there is a complementary approach that allows for a more
microeconomic-based analysis of the impact of regulations. This approach
identifies what the key drivers of growth are from the literature and then
looks to understand the impact regulation may have on the specific drivers.
This allows for a microeconomic-based understanding of how regulations
impact on the drivers and also gives greater opportunity to explore studies
based UK data.
The above broad approach addresses the conceptual framework for developing
the evidence for the first three objectives of the study. The remaining two
objectives are more difficult to assess at this stage. There is some risk that there
will be limited available research in the two areas and particularly on their likely
impact on growth. If this were to be the case we would be keen to talk to BIS on
how we could provide useful additional information on the two hypotheses both
from (i) a theoretical perspective on how they could impact on growth and (ii)
some description of the ways in which these approaches are being taken
advantage of today.
We understand that the aim of the literature review is to provide a robust
evidence base to develop high level policy guidance. As a result, the research will
highlight those areas of regulation that are likely to have significant impact on
growth.
Our understanding of your requirements
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Methodology
3.1
Overview
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Figure 1 provides an overview of our methodology. Details on how we propose
to achieve each of the objectives of the literature review are provided in the
following sections.
Figure 1. Overview of methodology
3.2
Objective 1 – Comprehensive list
Objective 1 is aimed at developing a comprehensive list of relevant literature examining the links
between regulation and economic growth.
Step 1.1
The first step is to define a range of information sources that we will use for the
literature search to ensure that our literature search is systematic and
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comprehensive. We envisage that the list of information sources will include the
following:



Respected databases for academic literature such as EconLit (the
American Economic Association’s electronic bibliography), the International
Bibliography of the Social Sciences (IBSS) and the Applied Social Sciences
Index, using key word searches.
Contact with a list of NGO’s and relevant think-tanks – we can discuss
who in particular, but we would expect to include the CBI, TUC, Chambers
of Commerce, IPPR, Reform, Policy Exchange amongst others.
A list of international organisations such as the OECD, World Bank,
International Monetary Fund, particularly to understand if there is work in
progress or relatively new working papers etc.
Step 1.2
We will check each of the identified information sources for relevant literature
that deals specifically with the relationship between regulation and growth – from
both the theoretical and empirical perspectives.

Based on the initial literature search, we will develop a long list of potentially
relevant articles. We will review the summaries and key features of each
article on the long list to select a short list of 20-30 articles that we will
review in detail. The advantage of this approach is that it provides
transparency in the selection of articles. We will work with BIS to agree a set
of criteria for shortlisting.
Outputs
The key output from this task is short list of literature to be reviewed. The lists
will contain all relevant source information such as author, date, title,
journal/report details, accessibility as well as a brief summary. We will discuss
both the long and the short list with BIS to ensure that are agree on the articles
that are selected for an in-depth review.
Potential risks
We have identified the following risks and ways of addressing these risks:

Range of literature is limited – it may be difficult to find relevant literature
that estimates the impact of regulation on growth. In order to be prepared
for a low return on our search we will use Professor Nicholas Crafts’
knowledge on research in this area to do a targeted second-round search.
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Range of literature is very extensive – there might be a high number of
articles on this area. In this case, we will liaise with BIS to define a number
of criteria for excluding research to ensure that our shortlisting process is
transparent.
Objective 2 – Theoretical mechanisms
This objective is aimed at identifying and outlining the most prominent theoretical relationships
between regulation and growth, critically evaluating different models, and assessing their policy
implications.
Step 2.1
We will review each of the short listed articles in depth. For each article we will
prepare a summary of the theoretical approach used.
Step 2.2
We will then compare the conceptual approaches used and we will identify
categories. Our critical evaluation will be based on:

the validity of the underpinning economic theory; and

the applicability of the theory to the UK context.
We consider that a robust theoretical mechanism between regulation and growth
needs to account for a positive and negative relationship. We will also need to
distinguish between changes in economic welfare and changes in productive
potential. For example, while a reduction in the number of regulations a business
start-up needs to comply with would lower the cost of business start-ups, it is
important to remember that the regulation could also have positive impacts – e.g.
in food handling regulation may increase the cost of starting up a restaurant but
consumers’ knowledge that the regulation exists is likely to help stimulate the
market. A theoretical approach that only considers the relationship between
compliance costs and growth may therefore not account for any positive growth
impacts from regulation.
Step 2.3
We will consider the relevant policy implications of the theoretical approaches
that are discussed. Theory may be a helpful guide here as it can help us
understand the most likely direction of impact and it may also be able to indicate
where, and how, different regulations impact.
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Output
As an input to the draft report, we will prepare an outline and analysis of
different conceptual approaches. We will also identify the relevant policy
implications.
Objective 3 – Empirical evidence
The objective of this task is to critically review and summarise the findings of the most robust
empirical studies on the relationship between regulation and GDP growth or levels.
It is important to keep in mind the findings from the theory section when
embarking on critical analysis of the empirical evidence. The outputs form the
theory section should act as a guide for understanding what is being estimated in
the empirical models – and also as a useful criteria for which empirical models
are robust insofar as they have a sound theoretical backdrop.
Step 3.1
We will review the empirical analysis undertaken in the short-listed articles. As a
first step, we will identify for each study:




The data set used (including time frame, geographical coverage, etc.);
The experimental set-up or econometric tools used (e.g. the type of
regression analysis)
The statistical significance of the findings and the potential for bias – e.g.
endogeneity bias
The key results of the empirical study (e.g. a reduction in the regulation
indicator from medium to low leads to a 0.03 percentage point increase in
annual GDP growth).
Step 3.2
We will evaluate the quality of the empirical analysis. We will assess the quality of
data used for the analysis and the appropriateness of the econometric analysis.
We will also analyse the results and the interpretation of the results to determine
whether the analysis can be considered robust. Our preliminary review of the
topic has indicated that a range of econometric approaches have been used to
estimate the relationship between regulation and growth. The following
problems with the empirical analysis appear to be common:
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The quantity and quality of regulation is often measured imperfectly by
relying on surveys such as the Fraser Institute Economic Freedom Index or
the World Bank Doing Business Indicators. These measurements include a
degree of subjective judgment that needs to be taken into account when
interpreting results.
Limited data variability across developed economies. The literature seems to
suggest that there is a strong relationship between regulation and growth
when considering cross-country data that includes countries at different
stages of economic development. However, it appears to be more difficult
to identify a significant impact of regulation on growth among developed
economies. This may partly be due to a lack of variation in the data. Even
though there are differences in the quality and quantity of regulations across
OECD countries, these may be too small to identify a significant
relationship.
For each research article that contains an empirical analysis, we will provide a
summary of the evaluation. The summary will cover strengths and weaknesses of
each of the studies.
Step 3.3
We will identify those articles that we consider to contain the most robust
analyses. We will then draw out policy implications from these studies.
Outputs
We will prepare the following inputs for the draft report:



Table that provides a description of the features of the empirical analysis
(see Figure 2 for an example);
Critical analysis of each of the articles that contains the strengths and
weaknesses; and
Identification of the most robust analyses and their policy implications.
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Figure 2. Indicative summary table of empirical analysis1
1 Note that the table is for illustrative purposes, we have not fully reviewed the article.
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Potential risks
We have identified the following risk and ways of addressing this risk:

Lack of detail – empirical studies may not provide all the information
required to assess the quality of the analysis. For example, some studies may
omit a detailed description of the dataset or key parameters. In cases where
we consider the analysis to be of significance, we could contact the study
team to obtain additional information on the analysis (if available).
We discussed in Section 2 how we would want to explore empirical models that
went beyond simply adding a regulations intensity measure to a standard growth
model. We would want to extend the analysis to see if richer information can be
obtained by looking at studies that examine the impact of regulations on key
drivers of growth.
3.4
Objective 4 – Creating new markets
The objective of this task is to identify and assess examples in the literature where regulations
have created growth by signalling future customer preferences.
We will review all of the shortlisted articles with this objective in mind. Where
articles refer to this mechanism of creating growth through regulation, we will
assess the robustness of the arguments by considering the counterfactual. While
it can be argued that regulations in some cases have signalled future consumer
preferences, it is important to clearly identify how growth would have developed
in absence of the regulation.
Outputs
We will draft a separate analysis on the evidence of regulation stimulating growth
by creating markets for new products. This will include an overview of the
evidence as well as a critical evaluation.
Potential risks
We have identified the following risks and ways of addressing these risks:

Lack of transparency – as the counterfactual is essential to determine
whether regulation has an impact on growth by creating new markets, the
studies may lack information on the counterfactual. In some cases, it may
also not be straightforward to identify how markets would have developed in
absence of regulation. In cases where we consider the evidence to be of
great importance, we can consult with some of Frontier’s regulatory experts
in the relevant area.
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
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There is some risk that there will be limited available literature on the likely
impact on growth. If this were to be the case we would be keen to talk to
BIS on how we could provide useful additional information on the
hypothesis both from (i) a theoretical perspective on how regulation can
impact on growth in this way and (ii) some description of the ways in which
the approach is being taken advantage of today.
Objective 5 – Alternatives to regulation
The aim of this objective is to highlight examples in the literature comparing the impact of nonregulatory alternatives to regulation on growth compared to traditional regulatory approaches.
We will review the short-listed literature for comparisons of the impact of nonregulatory alternatives and traditional regulation on growth. Non-regulatory
alternatives include self-regulation, co-regulation, information and education and
economic instruments which may be implemented using a range of tools such as
codes of conduct, voluntary agreements or labelling. These alternatives might be
expected to have a more positive effect on economic growth when compared to
traditional regulation if they free up business time from dealing with
administratively burdensome regulation and allow more time to be focused on
productive activities.
To fully understand the effect of non-regulatory alternatives on economic growth
compared to traditional regulation, studies would need to compare what has
happened to economic growth with the introduction of a non-regulatory
alternative with what might have been expected to happen otherwise (the
counterfactual). Since many factors influence the growth of a sector, let alone
growth across the economy, it will be very important that studies attempt to
control for all of the other changes that may have coincided with the change in
approach. We will therefore focus our research on identifying studies that
consider the counterfactual.
Output
We will draft a separate analysis on the evidence of on the impact of nonregulatory alternatives on growth compared to traditional regulation. This will
include an overview of the evidence as well as a critical evaluation.
Potential risks
We have identified the following risks and ways of addressing these risks:

A lack of studies that compare the impact of non-regulatory
alternatives to regulation and traditional regulation on growth. Due to
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the likely difficulties of isolating the effects of non-regulatory alternatives on
growth, there may be few studies that seek to achieve this. If this is the case,
we may need to draw together the lessons from less robust papers but clearly
highlight the key caveats and where further work would be required. It may
also be possible to draw on evidence contained with papers that do not
address the question of the effect on economic growth directly. For
example, if a paper looked at the effect of the alternative on business
productivity we could use a conceptual map to link this to the likely effects
on growth. If there is a lack of robust evidence we would be keen to talk to
BIS on how we could provide useful additional information on the
hypothesis both from (i) a theoretical perspective on how regulation can
impact on growth in this way and (ii) some description of the ways in which
the approach is being taken advantage of today.
3.6
Draft report
Based on all the inputs from Objectives 1 to 5, we will prepare a draft report for
BIS’ review. Our report will present the information and analysis in a clear and
accessible form. In consultation with BIS, we envisage the draft report to
contain the following:
1. Introduction

Background and project objective

Methodology

Report outline
2. Theoretical mechanisms linking regulation and growth

Overview of research reviewed

Critical analysis

Policy implications
3. Empirical studies linking regulation and GDP

Overview of empirical studies reviewed

Critical analysis

Policy implications
4. Evidence on regulation stimulating new markets
5. The impact on growth of regulatory alternatives
6. Conclusions
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
Annex A – Long list of research articles

Annex B – Summary tables for empirical analysis
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Final report
After BIS’ review of the draft report, we will address all comments in the final
version of the report.
3.8
Final presentation
We will prepare a final presentation on the key findings and conclusions of the
literature review. The presentation will be focused on the key outcomes of the
literature search and will identify the policy implications.
3.9
Project management
We will undertake this project in close collaboration with BIS. Our approach to
project management is based on regular communication to create a “no
surprises” environment. Our project manager will provide fortnightly updates on
progress in the form of a short email followed by a phone call to discuss any
outstanding issues. We have allowed for two progress meetings in addition to
the inception meeting, as we think it is important for BIS to be involved in all the
key decision making points during the project.
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Team
We have selected a small team of experienced economists to undertake the
literature review as this ensures consistency across the review of different articles.
It also allows each team member to have an in-depth involvement in the project.
Figure 3 provides an overview of our proposed team structure. A more detailed
description of the relevant experience of each team member is provided below.
Figure 3. Team overview
Michael Ridge, Project Director
Michael Ridge is Director and Chief Operating Office at Frontier and leads its
Public Policy Practice. He has over 20 years of experience working at the highest
levels of government, helping to apply economics rigorously but pragmatically to
inform policy development.
During his career, he has worked with all UK government departments on
various aspects of public policy development. He has been at the forefront of
developing best practice in regulation, evaluation and assessment for government
policies. This includes work for the BERR, the National Audit Office, the Audit
Team
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Commission as well as all major central government departments, including HM
Treasury.
Earlier in his career he worked in a high-powered research environment at the
Institute for Fiscal Studies, University of Oxford and Brunel University. He has
published academic papers in leading journals, including the Economic Journal
and the Journal of Public Economics.
Michael will be responsible for the overall quality of our outputs. He will provide inputs on the
methodology and review all outputs.
Professor Nicholas Crafts – Expert advice
Nicholas Crafts is Professor of Economics Director of the ESRC Research
Centre on Competitive Advantage in the Global Economy (CAGE) at the
University of Warwick, and a renowned academic expert on economic growth.
He has published many papers in academic journals and has also contributed to
research by the International Monetary Fund and the World Bank, including key
articles and papers on the links between regulation and economic growth. His
main fields of interest are long-run economic growth, British economic
performance and policy in the 20th century, the industrial revolution, and the
historical geography of industrial location.
Professor Crafts will provide advice on how to approach each of the objectives and will review the
outputs.
Annabelle Ong – Project Manager
Annabelle is a Consultant at Frontier Economics with 6 years’ experience in
economic consulting. Annabelle has provided advice to governments in the UK
Australia, New Zealand, and Singapore. Annabelle is experienced in developing
advice on regulatory and policy issues in a range of sectors. She has developed
and applied a range of analytical frameworks (including econometric approaches)
to assess regulation and policy across sectors.
Annabelle is experienced in managing complex projects. She is able to deliver
well-structured reports and presentations that are easily accessible by a wide
audience. Annabelle has undertaken literature reviews on a number of topics
including:



The costs and benefits of non-regulatory initiatives to reduce CO2 in
transport;
Performance measurement of national transport regulation in Australia
(including methods of how to verify costs and benefits from regulatory
impact statements); and
Methods for valuation of life for transport economic appraisal.
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Annabelle will be the day-to-day project manager for this project and will conduct a large part of
the research and analysis.
Ashley Kurtz - Researcher
Ashley Kurtz joined Frontier Economics as an Analyst in 2008 and works
primarily in its Public Policy, Transport and Water practices. She has particular
expertise in cost assessment and economic appraisal, and has worked on a
number of major impact evaluation studies for UK government departments.
Prior to joining Frontier, Ashley was an Economist at the Department of
Finance in Canada, where she analysed developments in the U.S. economy, with
a focus on the developments in housing and financial sector reform. Ashley
holds a Masters in Economics from Queen’s University at Kingston, where she
subsequently pursued doctoral studies.
Ashley will contribute to the research and analysis.
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Our experience and capabilities
Frontier Economics has an excellent track record of supplying high quality
economic analysis in the public sphere. All economists at Frontier are educated
to a minimum of Master’s degree level, and many have pursued doctoral
research. Our high standards of analysis allow us to attract a number of leading
academics as Associates, whom we draw upon to support our work and to act as
peer reviewers.
With respect to this study, we have substantial experience in critically analysing
academic papers, and in developing useful narratives from the analysis to support
policy development. Nearly all of Frontier’s studies will begin with an
understanding of the strengths and weaknesses in the literature in the field and
use this as a base for advice to clients.
A large part of the work carried out at Frontier involves analysis of regulations in
some form or another. We have a number of ex-GES economists who have
either been involved in developing guidance in Departments for regulatory
impact assessments, or have carried out assessments for particular regulations.
Typical examples include:

Analysis of the impact of environmental regulation on companies costs.

Estimating the compliance costs of changes to London Taxi regulations
on drivers and vehicle providers’ costs.

Analysis of planning constraints on the housing market.
We have recently been advising the government on parts of its growth strategy.
Our worked looked at the gains to the economy from better coordinated
infrastructure planning and the impact of telecommunications on economic
growth.
Recent relevant examples for Frontier’s work include:


BIS Frontier undertook an economic analysis to understand the
circumstances under which market studies and market investigations are
likely to result in significant changes for consumers, exploring all aspects of
market failure, including competition issues and the effect of government
regulations. Evidence for the reviews was obtained from a desk based
literature review of publicly available information and interviews with OFT
and BIS staff involved in the market studies. See Frontier’s report for BIS at:
http://www.bis.gov.uk/assets/biscore/consumer-issues/docs/10-921evaluation-impact-of-enterprise-act.pdf
BERR The impact of regulation: Frontier was commissioned to develop the
approach to the ex post analysis of the cumulative impact of government
Our experience and capabilities
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regulation. This included an application of the analysis to selected consumer
and competition regulations and legislation. As part of wider efforts to
decrease the burden of regulation, this project developed a detailed
methodology for the ex post evaluation of regulations and applied it to
selected
regulations.
See
the
published
report
at:
http://www.berr.gov.uk/files/file35725.pdf, which fed into wider
government efforts to reduce the regulatory burden.



HM Treasury An economic analysis to feed into the Prime Minister and
Chancellor’s launch of the “Plan for Growth” in November 2011,
concentrating specifically on the economics of interdependencies across
different areas of infrastructure, and the potential impacts on growth caused
by those interdependencies.
Frontier’s work provided specific
recommendations for government action to drive growth from this part of
the economy, evaluating systemic risks and opportunities in UK
infrastructure using a number of case studies to explore the subject and to
draw out ‘lessons learned’ that can be identified as generic conditions under
which risks or opportunities could potentially exist. See HMT’s report at:
http://cdn.hm-treasury.gov.uk/national_infrastructure_plan291111.pdf
Health and Safety Executive Frontier undertook an empirical analysis of
the effect of health on aggregate income and individual labour market
outcomes. This included the development of a detailed econometric
framework, estimation of results, and presentation of those results to
statistical, health and policy audiences. The project estimated both
macroeconomic growth equations to investigate the link between GDP
growth and aggregate health measures, and also microeconomic wage and
employment equations to estimate the links between specific health
conditions, the probability of being employed and wages of those who are
employed.
See
Frontier’s
report
at:
http://www.hse.gov.uk/research/rrhtm/rr639.htm
Department for Culture, Media and Sport As part of the
Communications Review, Frontier undertook a high profile analysis of the
links between investment in telecommunications sectors and wider
economic growth. The econometric analysis was based on the development
of a growth framework and statistical analysis of the role of certain types of
investment in growth. The econometric analysis could then be used to
forecast the future impact on growth of investment in this area. Our work
included exploring how some forms of regulation can be shown to constrain
the ability of the sector to contribute to growth in a range of ways. Frontier’s
report: http://www.culture.gov.uk/publications/8421.aspx
Our experience and capabilities
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Legal Services Board A project exploring the role that special bodies play
in the delivery of legal services and the risks this may pose to effective
regulation. Frontier undertook an investigation into the role of special bodies
(such as Citizens Advice Bureaus, charities, community interest companies)
in the market for legal services and the impact on them of changes to the
regulatory regime created by the Legal Services Act 2010. We combined
evidence from an in-depth literature review with a series of case study
interviews with economic principles to identify the potential risks to the
regulatory objectives, drawing out the consequent implications for the
framework of regulation and future work. See Frontier’s report at:
http://www.legalservicesboard.org.uk/news_publications/latest_news/pdf/
rep_lsb_special_bodies_final_report_07_07_11_stc.pdf
Our experience and capabilities
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23
Quality Assurance
Over the past few years, Frontier (and, specifically, its Public Policy practice) has
worked for all major UK government departments, the European Commission
and numerous other EU Governments and their agencies. Our continued good
reputation for the delivery of high quality, robust and timely analysis that is useful
to policy-makers reflects our quality assurance process and the level of
commitment we bring to projects.
We operate an internal quality assurance process to safeguard the output
produced for clients. It ensures that work delivered to clients is properly verified
and meets our high quality standards. There are three elements to this process:



Director oversight: all projects are overseen by a Director at Frontier.
They are ultimately responsible for the delivery of outputs to the
specifications required by the client.
Internal quality assessment: each project includes an internal QA Role
that is filled by a senior member of the firm who is not part of the project
team. They read through major outputs and provide comments to the
project team to ensure all our work meets the same high quality standards.
Academic quality assessment: Frontier teams include a leading academic
to ensure all material is vetted by an expert who is fully independent of the
project team and the company.
As stated in Section 4 above, Michael Ridge will provide Director oversight for
this project and will be responsible for the overall quality of our outputs, and will
review all outputs to ensure transparency, consistency of quality– both across this
project as well as in-line with Frontier’s standards, and to the satisfaction of BIS’s
specifications and expectations.
Within the direct project team itself, we also have quality assurance processes in
place. They guarantee the integrity of the data collection and analysis.
Depending on the circumstances, they include:

bespoke confidentiality agreements: willingness to sign agreements
to maintain the confidentiality of data, this includes IT processes that
are in place to ensure access only to those authorised;

data handling procedures: specific procedures for manipulating
primary data to ensure that all results are fully verifiable and traceable
back to the original primary data sets; and

report clarity: all our reports are proof read before being released.
The proof reading focuses particularly on the clarity of the presentation
of ideas. It aims to ensure that the particular audience for the report
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24
Frontier Economics | August 2017
Confidential
fully understands the analysis and its implications, regardless of their
familiarity with economic or other concepts used in the research.
Finally, Frontier ensures its quality through the staff that it hires. As a specialist
microeconomic consulting firm, we hire people with graduate degrees in
microeconomics. We advertise widely across Europe and our staff come from all
over the EU and beyond, reflecting our search for the best people available.
They are then provided with on-going training to ensure skills are kept up todate.
Quality Assurance
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December 2011 | Frontier Economics
25
Pricing Schedule
We propose to undertake the literature review for a total of £20,000 (excluding
VAT). The Pricing Schedule below shows our daily fee rates and number of days
proposed for the project amounting to a total of £31,500. Given the topicality of
this subject area and the opportunity for Frontier to build on this work for future
projects, we are prepared to discount to a fixed fee of £20,000.
Figure 4: Pricing schedule
DESCRIPTION OF SERVICE
FIRM FIXED
PRICE
Management, staff & support staff and their respective man-days:
Name & Position
Cost p d
(a) Michael Ridge
No of days (Actual cost at usual rates)
£ 2,400
1
(£2,400)
(QA Director)
(b) Nicholas Crafts
£ 1,200
3
(£3,600)
(Academic Expert)
(c) Annabelle Ong
£20,000
£ 1,000
15
£700
15
(£15,000)
(Project Manager)
(d) Ashley Kurtz
(£10,500)
(Researcher)
(Total: £31,500)
Sub-total/total consultancy cost
£20,000
Production of interim and final reports
Not
applicable
Any other costs (please state)
Not
applicable
Overheads and Profit
Not
applicable
TOTAL LUMP SUM PRICE (excl. VAT)
£20,000
Pricing Schedule
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27
Annex 1 – Insurance Documents
Annex 1 – Insurance Documents
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Annex 2 – Statement of Non-Collusion
Annex 2 – Statement of Non-Collusion
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Annex 3 – Form of Tender
Annex 3 – Form of Tender
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December 2011 | Frontier Economics
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Annex 4 – CVs
Annex 4 – CVs
Frontier Economics Limited in Europe is a member of the Frontier Economics network, which
consists of separate companies based in Europe (Brussels, Cologne, London & Madrid) and Australia
(Brisbane, Melbourne & Sydney). The companies are independently owned, and legal commitments
entered into by any one company do not impose any obligations on other companies in the network.
All views expressed in this document are the views of Frontier Economics Limited.
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