Business growth is still threatened by the burden of regulation but there are signs that the drive to cut red tape is having a positive impact, according to a national survey undertaken for the Local Better Regulation Office (LBRO).
Around half of businesses don’t think that local authorities understand their sector well enough to regulate them, according to the Business Perceptions Survey 2010 of 2,000 businesses.
And more than half of businesses feel the overall level of regulation in the UK is an obstacle to their success; with one in six businesses rating complying with regulation as their single greatest challenge.
However, the jointly commissioned study by LBRO and the National Audit Office (NAO), found business believes the purpose of locally enforced regulation is clear; and what is expected of them in order to comply is straightforward to understand. Respondents agreed that most regulation is fair and proportionate.
However, the cost of complying with regulation is significant, with a quarter of businesses employing at least one person to deal with a specific area of locally enforced regulation.
Clive Davenport, Policy Chairman, Trade and Industry at the Federation of Small Businesses, said: "Small businesses create a huge proportion of the country’s wealth yet are most vulnerable to inconsistency in regulation. Firms with few employees face considerable pressure on their time and resources, and are in no position to deal with overly complex administration. Red tape is like an additional tax."
NFU Comment
The NFU agrees with the majority of the LBRO and NAO survey findings. Results from our own surveys in the past on red tape pressures echo the same sentiments - farmers repeatedly cite the cumulative burden of regulation as a key barrier to increased productivity.
We have lobbied for a reduction in costly red tape for a long time, arguing that moving to a risk based approach is the only answer.
While there are examples of local authorities undertaking best practice, providing advice and guidance and working collaboratively, there is room for improvement on local authority inspection selection and risk. The NFU continues to highlight members concerns on these issues to the LBRO.
We have also tried to improve local authority regulators understanding of agricultural businesses by engaging with the LBRO on the Trading Places scheme and are looking to pilot this scheme with interested members.
Over the coming months the NFU will be feeding into Defra’s Regulatory Task Force review which will aim to look at ways of reducing the stranglehold of red tape on farmers and growers. This review is just the commitment the industry needs to address some of these concerns and to help ensure we have a competitive food and farming sector in the future.
Headline results
- Over half of businesses feel that the overall level of regulation in the UK is an obstacle to their success, and 1 in six businesses rate complying with regulation as their greatest single challenge.
- 67 per cent of businesses think the purpose of locally enforced regulation is clear.
- Around half of businesses don’t think that local authorities understand business well enough to regulate them. This compares to nearly two thirds of businesses thinking that it is clear what the purpose of regulation is and over half agreeing that regulation is fair and proportionate.
- One in ten businesses has ever made contact with an organisation to make a suggestion on how the regulatory regime could be improved. Of those that had made a suggestion, most (28 per cent) had contacted their trade association, followed by the local council (20 per cent).
- 57 per cent of businesses think that nationally enforced regulations are more burdensome than locally enforced regulations, with 27 per cent thinking locally enforced is more burdensome.
- Fifty-six per cent of companies agree that the overall level of regulation is an obstacle to their success
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