Is 'Red Tape' Holding Back Your Business

In April 2011 the Government launched a website challenging the public to help cut unnecessary regulations. With more than 21,000 regulations active in the UK today, this won’t be an easy task – but the Government has confirmed it is determined to cut the red tape!

 

It will, for the first time, give the public and businesses a chance to have their say on regulations that affect their everyday lives. The Government has set up a website www.redtapechallenge.cabinetoffice.gov.uk which will every few weeks, publish regulations affecting one specific sector or industry. Consumers, businesses and volunteers will be able to post comments and reviews as to which regulations are working, which are not, which should be scrapped, simplified or saved. Ministers will then review the feedback received and within a 3 month period decide which regulations they want to keep and why. However, the default presumption will be that burdensome regulations will be scrapped unless Ministers put forward a strong case for those regulations to stay.

 

David Cameron a key supporter of the campaign has said that “We need to tackle regulation with vigour, both to free businesses to compete and create jobs, and give people greater freedom and personal responsibility.”

 

Whilst the Government’s campaign seeks to reduce the number of burdensome and ineffective regulations in order to protect consumers, employees and the environment and build a fair society - it is important to have good regulation. Therefore, whilst some of these 21,000 regulations may be scrapped businesses should still be aware that the majority of these regulations will remain.

 

 

It is clear that these complaints are justified.

 

The introduction and expansion of the various regulatory frameworks for both commerce and industry, together with the often overwhelming burden of compliance, has seen the amount of red tape which small businesses have to deal with increase at an alarming rate. It seems that every day new regulatory liabilities, reporting obligations, additional penalties, codes of practice and guidance documents are introduced. Keeping up to date with these issues can, at first, appear to be an almost intolerable burden.

 

Fortunately there are a good number of resources available to help keep small businesses up to date. One of the very best resources, which is also free, can befound on the Business Link website at http://www.businesslink.gov.uk. There you will find details of new regulations specific to your business area together with the dates the regulations come into force. 

 

In addition, if a business requires in depth advice and assistance, there are a number of expert professionals with the necessary knowledgeand expertise to guide small businesses through the legal minefield.  As regulatory lawyers we regularly advise UK businesses both large and small on how to comply with the the regulations and legislation which affect them. 

 

Q Are small businesses still suffering under the pressure of red tape and new legislation because they have inadequate and inefficient systems to deal with the red tape that impacts on their enterprises? 

 

In reality the situation is more complex than this. The difficulty is that most regulations apply no matter how small or large a business is.Whilst a larger business will have economies of scale and can invest sufficient resources and manpower to set up systems to properlymanage risk and compliance, a smaller business cannot afford the same luxury. For example Health and Safety requirements applyequally to businesses with five or five hundred employees. The latter will employ one or more dedicated health and safety officers, whilst the small business would probably become unprofitable if a health and safety officer was taken on board.

 

Help is available for smaller businesses from regulatory professionals who recognise that there is often a great deal of strain on directorsor senior employees who could face criminal liability in addition to corporate responsibility or non-compliance. Utilising industry specificknowledge, a regulatory lawyer can help a business to avoid the costs of non-compliance by identifying the regulations andlegislation which affect the business, assessing the risks associated with these and then analysing existing control and risk managementsystems. Thereafter the lawyer will work with the business to put in place remedial measures and deliver tailor-made training packages tokey personnel.

 

Q Are there businesses in certain sectors that must be more vigilant about new legislation this year? 

 

The food sector in particular needs to remain vigilant, as it is one of the most heavily regulated business sectors. In addition to a substantial and very detailed body of industry-specific legislation (dealing with a number of issues such as food safety, food labeling, hygiene and weights and measures) the sector is very high risk from a health and safety point of view, second only to the construction industry. As it uses resources, and produces waste, it is also subject to the full force of environmental regulation.

 

It is understandable that there is a view that the imposition of three independent regulatory regimes – Food Standards, HSE and Environment Agency – on one sector, has the effect of tying it up in red tape rather more than promoting and generating better, safer and more effective working practices.

However it is likely that the food sector will be subjected to increasing regulatory scrutiny and we will therefore see greatly increased demands upon food businesses for continual assessment and improvements.