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More work needed to help businesses reduce regulations

01/07/2008

MPs have said that much more needs to be done to help businesses reduce the amount of time and money they spend complying with regulations.

The Commons committee for public accounts today published its report on how well the government's Better Regulation Executive and departments had introduced the Administrative Burdens Reduction Programme.

And chair of the committee, Edward Leigh said: "Sixty per cent of businesses regarded government regulation as an obstacle to their success, according to a National Audit Office survey last year.

"Clearly, regulation is more than just a burden – it can work to the benefit of businesses, their employees and consumers. But we can only support the principle that the task of businesses in complying with regulations be made less onerous to save time and money."

In 2005 the government introduced the programme with the aim of reducing the administrative activities undertaken by businesses to demonstrate compliance with regulations.

Mr Leigh claims, however, claims it was introduced without a proper assessment of its effectiveness.

"The Better Regulation Executive's programme for lightening the administrative burden was not, however, based on a rigorous assessment of how effective the proposed changes would turn out to be. The robustness of the estimate that a £16 billion increase in GDP could be achieved for an initial investment of £35 million has not been tested. And the claimed future benefits of a similar exercise by the government of the Netherlands were taken at face value.

"The executive needs to do much more work to produce robust estimates of what its programme is likely to achieve, with credible, evidence-based targets for each department. And where changes are made to the requirements to comply with regulations, the executive and departments must be more ready to alert the businesses who are likely to benefit."

It is estimated that complying with administrative activities imposed on businesses by regulations costs around £20 billion.