Almost all businesses that have responded to a survey by the UK government have reported that the country’s regulatory system is creating unnecessary obstacles, with many stating that complex rules, inconsistent enforcement and lengthy approval processes are blocking growth and adding to costs.
The results are based on the Department for Business and Trade’s Unlocking Business questionnaire, which received a response from 271 businesses from a variety of sectors. The survey shows that 96% of respondents reported that regulators were causing unnecessary problems in their industries and that 89% of them felt that existing regulations were putting an unreasonable burden on businesses.
In the department’s summary it stated that the overall regulatory framework in the UK “is frequently complex, inconsistent, slow and burdensome, particularly for small and medium sized enterprises (SMEs)”. The responses offer valuable evidence as government strives to tackle administrative burden on businesses, officials said.
Regulations were cited by many companies as a restriction to expansion, development of new products/services, and efficiency. The coordination of the activities of government agencies was also said to be inadequate as businesses were forced to submit information to multiple regulators.
Respondents identified disjointed responsibilities, conflicting instructions, and discrepancies between the UK regulations and international standards such as the European Union as factors of frustration.
The Extended Producer Responsibility (EPR) legislation for packaging, which came into force in April last year, was the most common regulation listed as having an impact on growth. The scheme will increase the amount companies contribute for the cost of household packaging waste and companies said that the reporting requirements are among the most resource-consuming compliance requirements they have.
Companies also mentioned issues associated with chemicals regulations, financial reporting requirements, IR35 contractor tax rules and environmental permits.
Also a major concern were delays in the regulatory decisions. Companies reported that they had not received any response from regulators after applying, or that the process of regulating their applications took several weeks to several years. The delays, respondents said, can make a substantial difference in operating costs and delay the investment decision.
Businesses demanded a streamlined and effective regulatory procedures, transparency, speed and use of digitalized processes. There was a lot of discussion about the requirement for single portals online so that companies could enter data once, for multiple government agencies, with the aim of cutting down on paperwork and duplication.
The results echo a study in March from the Federation of Small Businesses (FSB) that found that complying with regulations costs SMEs an estimated £36 billion a year and takes up about 379 million hours of working time.
As part of the UK government’s commitment to increase economic growth, it has announced a 25% reduction in the regulatory burden on businesses before the end of the current Parliament. It is part of the Chancellor’s aim to abolish £6 billion of business bureaucracy.
FSB Policy Chair Tina McKenzie welcomed the government’s aim, but pointed out that previous governments had announced similar goals and failed to deliver any meaningful reform. Recent changes, such as the implementation of Companies House for all companies, including the smaller ones, which has brought new costs, had caused problems for many smaller businesses, she said.
Kate Shoesmith, Director of Policy at the British Chambers of Commerce, stated that there needed to be better coordination between the government agencies, as business companies often feel they are filling in repetitive paperwork which does not benefit them. She called on the policy makers to make sure that future reforms do not increase administrative burdens.
