Department for Business, Innovation and Skills
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Making it Simple is Saving Businesses Nearly £3 Billion

Making it Simple is Saving Businesses Nearly £3 Billion

News Release issued by the COI News Distribution Service on 14 December 2009

Businesses are saving nearly £3 billion a year due to the Government’s Simplification programme which aims to get rid of unnecessary paperwork - saving firms time, money and hassle - according to the latest report published today.

The summary report, published by the Better Regulation Executive, detailed how more than 280 changes to regulations have helped save UK businesses around £2.9 billion a year so far. New simplifications introduced in the last 12 months, which have made life simpler for businesses, include:

creating a more flexible way for employers and employees to resolve disputes at work;no longer testing every spirit optic; anddigital tachographs for HGVs.

Ian Lucas, Minister for Business and Regulatory Reform, said:

“Simplification is making a real difference to the everyday lives of businesses, helping to make things as simple as possible, saving more than £8 million a day, every day.

“Individual measures may look small but it is overall impact that adds up to real savings. And support from the business community has helped make sure that savings to businesses are felt on the ground.

“But the programme also shows real change across government in its attitude towards regulation. Delivering the right business environment to promote growth relies on creating a flexible regulatory framework that minimises costs to business but ensures essential protections and rights are in place. Better regulation, with simplification at its core, is making that possible.”

An independent panel including representatives from the business community has tested whether simplification measures were effectively communicated to businesses and were felt in the ground. In May this year, this Panel again scrutinised the Government’s delivery and validates 77.5% of the Programme’s gross savings.

The Government is on track to meet its target of cutting the administrative burden on businesses by 25 per cent by May 2010 that will deliver an expected £3.3 billion in annual net savings.

The report also details how government has delivered more than 30 per cent net reduction of the amount of information requests from central government on front-line public sector workers, such as nurses and police, and how it has cut more than £1.3 billion in wider costs of complying with regulation.

The Government recently announced a new commitment to cut the costs of regulation further, by £6.5 billion by 2015. This was part of a package of measures to strengthen the management of regulation with the publication of the Government’s regulatory programme until April 2011 and the creation and set up of a new independent scrutiny body to advise on the costs and benefits of new regulation.

The Government announced in the Pre-Budget Report that it has already identified potential savings of over £1 billion towards the new target. Recognising the importance of ensuring that the programme focuses its attention on the areas which are of greatest concern for business, the Government is today launching a call for evidence, to enable business and other interested parties to feed in suggestions of which regulatory activities place disproportionate costs on business, compared to the benefits delivered, and to propose action that will reduce or remove these costs.

Notes to Editors

The total annual net savings delivered by the cross-Government simplification programme at December 2009 is around £2.9 billion, which represents 22 per cent of the 25 per cent target, meaning that nearly 90 per cent of the target has been achieved.

The Better Regulation Executive, part of the Department for Business, published a summary report “Making Life as Simple as Possible” along side each of the 19 Government Departments and agencies that also produce reports detailing their progress against the Administrative Burdens Reduction Programme (ABRP). The summary report, with links to all of the individual reports, will be available at www.berr.gov.uk/whatwedo/bre/index.html

In October 2009 the Government announced a target to reduce the regulatory burden on business by a further £6.5 billion annually by 2015. This includes:

A further net annual reduction of £1.5 billion in the administrative burdens of compliance with regulation, e.g. unnecessary paperwork and record keeping; and£5 billion annual reduction in policy costs, those costs that business has to bear to deliver the policy goal of regulation

In order to maximise the savings that the programme delivers, the Government is considering simplification by themes, rather than on a department-by-department basis, in order to look at regulation in the way that business experiences it. So far, eight themes have been identified: Built Environment; Business Law; Consumer Issues; Employment and Skills; Health and Social Welfare; Natural Environment; Transport; and Workplace Health and Safety.

In 2005 the Government undertook an analysis of around 1,400 regulations and the 20,000 separate requirements they place on business and the third sector. Based on this work it is estimated that the total administrative burden on business is currently £13 billion annually. Delivering the Government target of a 25% reduction is expected to produce £3.3 billion in annual savings by May 2010. Government Departments and agencies that are responsible for these regulations were set their own individual reduction target of 25 per cent and they produce an annual “Simplification Plan” report each year in December detailing their progress towards their target.

The Administrative Burden Reduction Programme uses the Standard Cost Model methodology which is an internationally recognised approach, recommended by the Better Regulation Commission and supported by the business community. It provides an understanding of the landscape of regulatory cost as the basis for deciding where to focus effort on simplification. To keep the measurement of burdens and savings practical, the methodology uses small sample sizes and so is indicative rather than statistically robust; as a result, the reported figures for the administrative burden reductions achieved are also indicative.

Submissions to the call for evidence can be made through simpler2015@bis.gsi.gov.uk. The Government also plans to engage with stakeholders through a range of discussions and events, covering each of the themes, to enable stakeholders to put their ideas directly to the officials leading the theme groups.

Department for Business, Innovation & Skills

The Department for Business, Innovation and Skills (BIS) is building a dynamic and competitive UK economy by: creating the conditions for business success; promoting innovation, enterprise and science; and giving everyone the skills and opportunities to succeed. To achieve this it will foster world-class universities and promote an open global economy. BIS - Investing in our future.

Contacts:

BIS Press Office
NDS.BIS@coi.gsi.gov.uk

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