Business-friendly regulation saves firms over £40m

Posted on 11 Feb 2015 by Jonny Williamson

Business Secretary Vince Cable, and Business and Enterprise Minister Matthew Hancock have announced that better enforcement of regulation is saving business more than £40 million every year.

The Focus on Enforcement review programme, which asks firms to identify poor enforcement practices that hold them back, has benefited around one million businesses and boosted growth in nine vital sectors of the economy from pharmaceuticals to food manufacturing.

Nine reviews have covered:pharmaceutical manufacturing, fire safety, care homes, volunteer events, food manufacturing, childcare, coastal developments, pubs, and chemicals manufacturing. A tenth looked at appeals processes across a range of sectors.

This builds on Government action to scrap or reform regulatory rules which has reportedly saved firms some £10bn over this Parliament.

Addressing a round table of business leaders and regulators who have helped drive a range of reforms to improve how regulation is enforced, Cable said: “Better enforcement creates a more level playing field for business and ensures important regulations on safety and the environment give the public the essential protection they are entitled to.

“By working with businesses to clear away costly and time-consuming bureaucracy, we are making it easier for firms to focus on what really matters and to plan for the long term, creating stronger growth and more jobs.”

Hancock added: “Our zero-tolerance approach to pointless red tape is a key part of the Government’s drive to make the UK the best place in the world to start and grow a business. 

“We are stripping out thousands of pages of unnecessary paperwork, ensuring businesses can operate, invest and grow with confidence.

“We will be the first government in modern history to have lightened the burden of regulation – saving business more than £10bn. Ripping out and reforming regulation is helping create an economy that nurtures enterprise, generating 760,000 new businesses since 2010.

“More businesses and more jobs mean hardworking families are better off.”

Regulators including the Health and Safety Executive, Environment Agency and Food Standards Agency have responded to Focus on Enforcement reviews with major reforms which have been welcomed by trade bodies across the country.

Problems they have addressed include the following:

  • Smaller chemicals companies were being advised by some trade associations not to grow due to the increased regulatory burdens this would entail.  Clearer advice from regulators is now encouraging growth and joined-up planning between regulators is reducing burdens on business.
  • Law-abiding businesses had to spend up to six hours with a fire inspector ticking boxes. Now audits for premises with a good record have been significantly shortened (typically lasting only 45 minutes) enabling managers to get back to the day job.
  • Confusing guidance led many food-makers to believe that they always had to buy two sets of equipment to prepare food – new guidance makes clear where it would still be safe to clean and re-use a single set.
  • Chemicals companies were asked to foot the bill for inspections, without knowing what they were paying for – now the regulator has set out what they can expect for their money, like any paying customer.
  • Coastal developments were delayed as investors were bogged down in dealing with multiple public authorities.  They are now able to deal with a single point of contact offering a faster, streamlined service which is enabling them to invest.  This has helped unlock the £2bn Mersey Gateway project, boosting local jobs and growth.
  • Food manufacturing businesses were confused by long, complex guidance – they now have a simple online tool to support them, and guidance that has been rewritten, with the industry’s input.

The Government is also tackling commonly occurring problems raised by businesses across the board. Some do not feel that regulators are accountable to those they regulate; that it is too hard to query odd or inconsistent judgements; and it is too easy for regulators to introduce changes that impose new costs on business without proper thought.

Business-led Focus on Enforcement reviews are currently underway in three sectors: fresh produce imports, electronics exports and farm livestock.

In response Ministers are introducing a small business appeals champion to work within every regulator to enable business to challenge poor or unfair decisions made by regulators. And a ‘growth duty’ on regulators will help ensure that the enforcement of regulation does not unnecessarily impede enterprise.

The Government has also rewritten the Regulators Code to set out clearer standards for regulators, introduced the accountability for regulator impact framework to make sure business burdens are properly considered by regulators before significant changes are introduced, and extended the Primary Authority scheme to improve regulatory guidance and consistency.

Focus on Enforcement has now been made a permanent programme giving all business groups a route into government to raise issues faced by their members.