Businesses sceptical about ability of councils to regulate

Almost half of businesses think that local authorities do not understand their sector well enough to regulate them, according to a survey by the Local Better Regulation Office and the National Audit Office.

More than a third (38%) of the 2,000 respondents to the Business Perceptions Survey 2010 also lacked confidence in the ability of councils to take a consistent approach to enforcement.  A similar number (31%) felt that different councils do not take a joined-up approach to regulation. In both cases, large businesses are less likely than smaller ones to have confidence in local authorities.

The survey also found:

• 57% of businesses feel that the overall level of regulation in the UK is an obstacle to success
• One in six businesses rate complying with regulation as their greatest single challenge
• 82% of respondents considered the role of local authorities as both to enforce the law and to provide advice
• More than half agree that regulation is fair and proportionate
• 57% of businesses think that nationally enforced regulations are more burdensome than locally enforced regulations. By contrast, 27% find local regulations more burdensome.
• Nearly two-thirds of businesses think that it is clear what the purpose of regulation is

Clive Grace, chairman of the LBRO, said: “Locally enforced regulation such as food safety, consumer protection, fire safety, and health and safety is essential but it can have a significant impact on business growth.

“The way local regulation is enforced is just as important as the rules, and there are serious concerns about the cost to business of dealing with it. However, there are positive signs from this research and other studies. There is evidence of a growing partnership between business and local authorities, which is good news and shows that the commitment to better local regulation is beginning to pay off.”

Grace insisted that the LBRO’s Primary Authority and Trading Places programmes were addressing the issues of local authorities’ understanding of business and inconsistency of enforcement and advice.

Clive Davenport, policy chairman for trade and industry at the Federation of Small Businesses, said: “Small businesses create a huge proportion of the country’s wealth yet are most vulnerable to inconsistency in regulation. Firms with few employees face considerable pressure on their time and resources, and are in no position to deal with overly complex administration. Red tape is like an additional tax.”