Regulation crippling small businesses

25/06/2009

Small businesses are struggling under the weight of regulation, it has been claimed, as new research puts red tape costs for employers at nearly £12bn per year.

Small businesses spend an average of 37 hours each month complying with regulation, according a survey by the Forum of Private Business (FPB).

The FPB is urging the government to ‘step up’ its effort to reduce the burden of regulation on small firms.

Representatives of the FPB will be attending a meeting of the government’s Better Regulation Executive (BRE) this week.

Matt Goodman, the group’s policy representative said: “As part of a new department with a broader remit, the BRE must continue to put the smallest businesses at the forefront of its plans to change the culture of bureaucracy in the UK.

“Complying with red tape remains one of the major cost burdens facing smaller businesses, swallowing up valuable time and money that could be used more profitably elsewhere.”

The FPB survey found that micro businesses, those with less than nine employees, spend an average of 33 hours a month dealing with regulation, while companies with 10-49 employees spend 48 hours a month on it.

Employment law tops the list for regulation costs at an annual £2.4bn, while health and safety comes second at £2.1bn.