UK business faces red tape confusion, NAO says

The total impact of red tape on businesses is difficult to quantify

Each business typically has to comply with 60 different regulations overseen by a number of official bodies, a report has said.

Many breached the rules because they did not know which regulations applied to them, the National Audit Office (NAO) said.

It found that government departments did not communicate effectively on the red tape they imposed.

The body set up to cut red tape accepted more communication was needed.

A study by that body - the Better Regulation Executive (BRE) - last March estimated that the cost of the additional 265 new regulations which could be imposed over the following year would be £9.9bn - but calculated that the benefit to society of the new rules would be £11.6bn.

Clarity

The NAO report said that the total cost to businesses of all regulations was not available.

"Businesses, in particular small and medium enterprises, often lack clarity about how to comply fully with regulation," the report said.

"The totality of regulation faced by an individual business is complex and businesses that we interviewed typically have to consider as many as 60 regulations covering areas such as employment, planning, health and safety and sector specific regulation, and governed by multiple regulatory bodies.

"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."

Andrew Cave, of the Federation of Small Businesses, said that it was the "churn and change" associated with regulation that small businesses had problems dealing with.

The government has said it wanted to end "tick-box" regulation, and Sir Don Curry, of the BRE, said changes were already underway.

"Although the report focuses on work before May 2010, I am pleased that they have recognised that the Better Regulation Executive has developed important elements that will bring sustainable reductions in regulatory costs and deliver significant benefits," he said.

"I recognise, however, that there is more to do to communicate our plan for regulatory reform and we will be working with officials and ministers across government to deliver this in the coming months."