The Forum of Private Business (FPB) has welcomed the new coalition government’s move to cut red tape but fears attempts to tackle the situation could create further bureaucracy.
The plan includes a new cabinet ‘star chamber’ to spearhead the drive to reduce red tape, an immediate review of all forthcoming regulation, a new ‘challenge group’ team charged with devising innovative non-regulatory solutions and a ‘one in, one out’ approach to introducing new regulations.
The forum’s chief executive Phil Orford said: “Our calls for a comprehensive review of red tape finally appear to have been heard. The first job of the new star chamber will be to scrutinise all new regulations that are in the pipeline and that has to be welcomed.
“The government must ensure that, in administering the work of the Reducing Regulation committee, it does not create more bureaucracy to deal with red tape.
“If this is achieved, combined with the ‘one in one out’ approach and the work of the challenge group in devising innovative, non-regulatory solutions to social and environmental challenges, we look forward to an enterprise culture that is conducive to small business growth rather than restrictive, as we have at present with the record levels of red tape that exist.”
One forum member said of the current system: “[The legal framework] is complicated, unclear over-regulated and obtuse which leads to scaremongering by certain companies who want to sell you their services and this in turn leads to even more confusion.”
Last year, the forum’s Cost of Compliance survey revealed that red tape costs smaller employers £9.3 billion per year in internal costs, mainly the time spent on administration, and found they spend an average of 37 hours per month complying with the law.
According to the FPB's research, at £2.4bn the amount spent by smaller businesses on employment law is the highest out of all seven different types of legislation categorised in its quarterly survey. It surpasses the £2.1bn per year spent on health and safety administration and £1.8bn on tax.
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