REDUCING THE COST OF COMPLYING WITH REGULATIONS: THE DELIVERY OF THE ADMINISTRATIVE BURDENS PROGRAMME 2007
Publication of the Committee's 32nd Report, Session 2007-08
Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:
"Sixty per cent of businesses regarded government regulation as an obstacle to their success, according to an NAO 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.
"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."
Mr Leigh was speaking as the Committee published its 32nd Report of this Session which examined how the Better Regulation Executive and departments had introduced the Administrative Burdens Reduction Programme (the Programme), progress in delivering reductions in burdens, and the long-term results of the Programme.
In 2005, the Government commenced the Programme, with the aim of reducing the cost of the administrative activities undertaken by business to demonstrate compliance with regulations. The Government's objective is to reduce the burden of administering regulations without jeopardising policy objectives.
The Programme originated in a report by the Better Regulation Task Force, which reviewed an equivalent exercise undertaken by the Dutch Government. The rationale was that businesses could redeploy resources previously used in complying with regulation to more productive activities which, in turn, would benefit the UK economy. The Better Regulation Task Force estimated that the Programme offered the potential for an estimated increase in GDP of £16 billion for an investment of £35 million.
The Better Regulation Executive, now part of the Department for Business, Enterprise and Regulatory Reform (the Department), co-ordinated the implementation of the Programme and led the work to measure the size of the burden on businesses.
The Better Regulation Executive estimated that complying with the administrative activities imposed on businesses by regulation costs businesses some £20 billion a year. Central Government departments and regulators are implementing the Programme and have published simplification plans detailing how reductions will be achieved. Her Majesty's Revenue and Customs (HMRC) has undertaken a separate but parallel exercise, and has drawn up an equivalent plan to achieve reductions.
Under the Programme, 18 departments and regulators have committed to reducing administrative burdens by 25% by 2010. In addition, HMRC has established its own targets: to reduce the cost to business of complying with tax forms by 10%, and of audit and inspection by 15%, by 2010-11.