Red tape burden causing businesses to breach regulations
Sheer scale of regulations faced by businesses mean they often are unsure which rules apply to them, says NAO
UK BUSINESSES often breach government regulations because they do not know which of the vast array of rules apply to them, according to the National Audit Office (NAO).
On average, a British business has to comply with 60 different regulations from a range of different regulatory bodies, which are failing to communicate effectively the rules they impose, said the NAO report.
It found that the Better Regualtion Executive (BRE), established in 2005 to help reduce the regulatory burden and its associated costs, was not yet in a position to achieve value for money in their management of regulation.
“Businesses, in particular small and medium enterprises, often lack clarity about how to comply fully with regulation,” said the report. “Many businesses interviewed could not identify all the regulations affecting them. As a result, some businesses fall into non-compliance, which can counteract the intention of the original legislation and lead to significant costs for the business.”
A BRE study in March last year said that the projected £9.9bn costs of 265 new regulations would be outweighed by the £11.6bn benefit to society of introducing the rules.
However the NAO said there was no estimate for the total cost to business of the total regulatory burden.