Department for Business, Innovation and Skills
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Government takes action to save money and boost business certainty

Government takes action to save money and boost business certainty

DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2009/49) issued by COI News Distribution Service. 5 March 2009

The Government will pilot a one stop shop for advice on health and safety and employment legislation under new measures announced today. It will help them to comply with the law and save them time and money. The advice given will be backed by insurance, so businesses can be confident in following the advice they are given.

An independent review, undertaken by Sarah Anderson, recommended a range of innovative solutions to improve the quality of guidance government gives to business. The recommendations are designed to increase compliance with the law, boost business confidence in government advice and cut costs for small businesses. The government has today published its response to the review by committing to take actions including:

* piloting a telephone advice service, which provides tailored and "insured advice" to help businesses comply with employment and health and safety law;

* removing disclaimers which bring the accuracy of guidance into question and encouraging inspectors to avoid prosecution of "reasonable" businesses; and

* setting out when it will update the most frequently used guidance to comply with the Code of Practice on Guidance.

Stephen Carter, BERR Minister said:

"In the current economic climate it is more important than ever that we help to reduce the time and money businesses spend on compliance with regulation. Getting guidance right for small businesses frees up precious resources which people need to run their businesses. These new plans will give a much needed boost for small firms, giving them clarity and confidence in government advice"

Almost half of all businesses use external advice about how to follow regulation, spending at least £1.4 billion per year on such services. Some 75 per cent of medium sized enterprises report having paid for advice on employment or health and safety regulation. SMEs are disproportionately represented in employment tribunal applications, for example, with businesses with 50-249 employees generating 21 per cent of tribunal applications but only accounting for 4 per cent of total employment.

In order to redress this imbalance the review focused on improving three areas: providing certainty over outcome; making guidance more accessible; and improving the clarity of guidance for businesses.

Other proposals accepted by the Government include:

* a 'quick start' summary for each piece of guidance, setting out essential actions firms must follow to comply with the law.

* a central contact point for reporting inconsistent or inaccurate guidance, with an obligation on government to respond and resolve the issues.

* actions to broaden the skills of inspectors so that they can provide better advice based on the needs of businesses.

Notes for editors

1. In March 2008, as part of the launch of the Enterprise Strategy, the Government asked Sarah Anderson to "make recommendations on ways of ensuring firms can place greater reliance on official guidance and thereby reduce the cost of compliance."

2. The Government response to the Anderson Review is published today and can be found at http://www.berr.gov.uk/

3. As part of the Review research was commissioned on government guidance from more than 750 SMEs, with face to face discussions with more than 90 small businesses across a wide range of sectors, sizes and at different stages of development.

4. The research highlighted that businesses had the most difficulty understanding health and safety and employment legislation. Firms clearly indicated that they felt government guidance does not provide certainty whether following it means complying with the law, that they did not understand all of the content and did not know where to find relevant information to help them comply with the law.

5. Small businesses face a greater burden, in terms of costs and time spent per employee, complying with regulation. Almost half of all businesses use external advice about how to follow regulation, spending at least £1.4 billion per year on such services. Some 75 per cent of medium sized enterprises report having paid for advice on employment or health and safety regulation. In addition, SMEs are disproportionately represented in employment tribunal applications. Businesses with 50-249 employees, for instance, generate 21 per cent of tribunal applications but account for only 4 per cent of total employment.

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