New red tape rules must be backed by real culture change, says business group
The new system is part of a package of measures the Government hopes will create a culture of ‘regulation as a last resort’. It will be overseen by a strengthened Regulatory Policy Committee tasked with scrutinising proposed regulations and the implementation of EU legislation in advance of policies being formed.
The Government has agreed a set of ‘principles of regulation’ for departments to follow when they are considering new laws impacting upon businesses and social enterprises.
The Forum is warning that, for the committee to be truly effective in implementing the new system, it must be able to enforce these principles and influence regulatory practice within government departments.
“It is good to see the Government pushing ahead with its commitment to improving the regulatory landscape,” said the Forum’s Head of Campaigns Jane Bennett. “The concept of introducing regulations only as they are needed is absolutely necessary given the existing burden on small businesses, but it will require a change in behaviour for many government departments.”
She added: “The independent Regulatory Policy Committee must be a real watchdog influencing departmental practice if it is to bridge the gap between over-regulation, which is what we have now, and lighter-touch intervention. That means being able to enforce these principles of regulation, which are as yet undefined. As with many of the coalition’s new policies, the follow-through is what will be important.”
Last year, the Forum’s ‘Cost of Compliance’ survey revealed that 81% of businesses surveyed believe the existing regulatory framework is not robust, unrealistic and unfair.
It found that red tape costs smaller employers £9.3 billion per year in internal costs, mainly the time spent on administration, and found they spend an average of 37 hours per month complying with the law.
Particularly time consuming were the tasks of understanding new regulations (73% thought this was excessive) and the general monitoring and administering of legal responsibilities (74%). Monitoring and administration was deemed to be most costly (45% felt the cost was excessive), closely followed by implementing health and safety legislation (selected by 42% of respondents).
According to the Forum’s research, the amount spent by smaller businesses on employment law – at £2.4 billion – is the highest out of all seven different types of legislation categorized. This surpasses the £2.1bn per year spent on health and safety administration and £1.8bn on tax.
The new ‘one-in, one out’ rule will initially apply only to legislation affecting businesses and the third sector, but according to a statement from the Department for Business, Innovation and Skills (BIS) it could be expanded in due course.
Business owners and members of the public can identify the specific regulations they believe should be removed or changed via the Government’s Your Freedom website, which was launched last month.
As part of its Communications Director business support solution, the Forum’s Public Affairs team wants to hear from small businesses who are struggling because of red tape. They should email email@example.com.
The not-for-profit Forum is helping businesses to comply with regulations via its Legal, HR and Health and Safety Director business support solutions.
Small firms can benefit from a dedicated member helpline, a 24-hour legal advice line, legal expenses insurance and essential Health and Safety and Employment Guides.
Call 0845 612 6266 or visit www.fpb.org for more information.