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26/07/2011
Cost Of Red Tape Reaches £16.8bn
Research carried out by the Forum of Private Business has found that small firms are spending more time and money on complying with regulations, £16.8 billion per year to be exact, despite the Government's legislation-busting initiatives to date.
In all, 84% of Forum members reported an increase in time spent complying with legislation since 2009, when the not-for-profit organisation's previous ‘cost of compliance' Referendum survey took place.
Further, 67% of respondents are being forced to spend more money on external consultants to help them avoid legal pitfalls.
Based on data provided by members who took part in the survey, the total annual cost of compliance for the UK's smaller employer is £16.8 billion - £11 billion in internal costs and £5.8 billion for external an contractor - which is £14,200 per firm on average.
"While this is a rise of just 1% compared to two years ago, the increase is greater in real terms because economic activity, which drives the need for compliance, has shrunk significantly since the 2009 survey was carried out," said the Forum's Head of Campaigns Jane Bennett.
"Despite several government initiatives, some more effective than others, it is clear that we are heading in the wrong direction as far as reducing regulation for small business owners is concerned. We simply want these measures to work properly and for the voices of the UK's business owners to be clearly heard.
"We also want the authority of the Local Better Regulatory Office (LBRO) to be maintained following its move into the Government's business department, and targeted support, sympathetic enforcement and grading of compliance would be helpful."
Ms Bennett added: "The Regulatory Policy Committee has been established to ensure legislators take full account of the impact of regulation on small businesses. We fully support its work in rejecting inadequate impact assessments and recommend it continues to refuse to endorse any regulations that have not taken into account the impact they have on small businesses."
(BMcN/GK)
In all, 84% of Forum members reported an increase in time spent complying with legislation since 2009, when the not-for-profit organisation's previous ‘cost of compliance' Referendum survey took place.
Further, 67% of respondents are being forced to spend more money on external consultants to help them avoid legal pitfalls.
Based on data provided by members who took part in the survey, the total annual cost of compliance for the UK's smaller employer is £16.8 billion - £11 billion in internal costs and £5.8 billion for external an contractor - which is £14,200 per firm on average.
"While this is a rise of just 1% compared to two years ago, the increase is greater in real terms because economic activity, which drives the need for compliance, has shrunk significantly since the 2009 survey was carried out," said the Forum's Head of Campaigns Jane Bennett.
"Despite several government initiatives, some more effective than others, it is clear that we are heading in the wrong direction as far as reducing regulation for small business owners is concerned. We simply want these measures to work properly and for the voices of the UK's business owners to be clearly heard.
"We also want the authority of the Local Better Regulatory Office (LBRO) to be maintained following its move into the Government's business department, and targeted support, sympathetic enforcement and grading of compliance would be helpful."
Ms Bennett added: "The Regulatory Policy Committee has been established to ensure legislators take full account of the impact of regulation on small businesses. We fully support its work in rejecting inadequate impact assessments and recommend it continues to refuse to endorse any regulations that have not taken into account the impact they have on small businesses."
(BMcN/GK)
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