Red tape on the increase says report

Brian Payne
Brian Payne

Small and medium-sized businesses in the south west are having to cope with an ever-increasing “red tape” burden and have little faith that the situation will improve after a General Election, according to a new survey.

These are among the findings of the latest Red Tape Watchdog survey, carried out by Top 50 accountancy firm Bishop Fleming, which has offices in Exeter, Torquay, Plymouth, Truro and Bristol.

The research is conducted to coincide with the Government’s “common commencement dates”, on which all rules and regulations affecting businesses are introduced.

The latest survey found that 81% of owner-managed companies believe that the amount of regulations affecting them has increased over the past year, up from 75% six months ago.

The remainder say they have noticed little difference either way, with not a single respondent saying that the Government has delivered on the promise made to businesses three years ago by then Chancellor Gordon Brown, to light “a bonfire of red tape”.

As of last month, employers have had to deal with the final stage of implementation of the Companies Act, the single biggest piece of legislation ever to pass through Parliament, along with regulations on redundancy pay and the National Minimum Wage.

Most businesses – 57% – believe the three main political parties will promise to revisit the issue of red tape before the forthcoming General Election – but just 11% actually believe the new Government will actually deliver on its pledge.

The survey, conducted among around 500 businesses across the south west, also reveals that 57% of firms are spending up to £5k a year more than they were a year ago on complying with regulation. Again, not a single respondent said they devote less time to red tape compared with a year ago.

Meanwhile 59% of businesses say red tape accounts for more than 10% of their time, up by more than a quarter on the last survey, with 22% saying it takes up over a fifth of their working week, an increase of 10%. The number who say they are spending “significantly more” time on complying with regulation has risen slightly to 49%.

And when asked how they found out about new regulation affecting their business, some 30% responded that it was through their professional advisers, with the same number saying that they usually have to find out the information for themselves.

Brian Payne, chief executive at Bishop Fleming, said: “The Government’s decision to postpone the implementation of new employment rights for agency workers at least shows that Ministers are listening to businesses.

“However it is hugely disappointing to see that the region’s owner-managed businesses still feel that the burden of regulation is increasing at a time when they are under unprecedented pressure.

“It is equally worrying that while they expect the politicians to pay lip service to reducing red tape over the coming months, comparatively few firms actually expect anything to be done about it, regardless of which party wins the next General Election.”