Manufacturing SMEs crippled by ₤1.2bn annual legislation compliance costs

Posted on 1 Jul 2009 by The Manufacturer

Figures released yesterday by the Forum of Private Business (FPB) reveal that SMEs in the manufacturing sector are left more than ₤1.2bn out of pocket each year due to complying with government legislation.

Business lobby and support group FPB’s research – published in its quarterly survey of members, Referendum – found that recession-hit manufacturers are forced to spend an average of 35 hours a month on government-imposed bureaucracy such as paperwork and form-filing.

Conforming to health and safety regulations alone left small manufacturers ₤375m out of pocket, coupled with employment legislation to the tune of ₤320m annually, and holiday-related compliance totaling ₤130m.

Commenting on the figures, Phil Orford, FPB chief executive, said: ‘‘Many of Britain’s manufacturers are finding the current trading conditions incredibly tough and can ill afford to spend precious time and money on dealing with excessive legislation.’’

Representatives from the Better Regulation Executive (BRE) have been holding roundtable discussions with small businesses from across the UK. They are seeking to save ₤3bn annually by reducing government red tape – FPB policy representative, Matt Goodman, attended a BRE meeting last Friday to put across the lobby group’s calls for the legislative burden on SMEs to be reduced.

FPB’s research, he said: ‘‘Shows that complying with red tape remains one of the major cost burdens facing smaller businesses, swallowing up valuable time and money that could be used more profitably elsewhere.’’

‘‘At a time when protecting both workers and businesses should be a priority, regulations are increasingly burdensome.’’

Edward Machin