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National Audit Office Press Notice

Reducing the cost of complying with regulations: The delivery of the Administrative Burdens Reduction Programme, 2007

THIS STATEMENT IS NOT FOR PUBLICATION OR BROADCAST BEFORE 0001 HOURS ON WEDNESDAY 25 JULY 2007

Report by the Comptroller and Auditor General
HC 615  2006-2007
25 July 2007
ISBN: 9780102947304
Price: £13.50

The NAO has found that departments are committed to identifying possible reductions and are taking a pragmatic approach to identifying measures to reduce burdens. The departments evaluated in the NAO study are seeking to reduce quantified administrative burdens, but also deliver wider improvements in the regulatory environment by tackling aspects of regulation that businesses find particularly irritating and burdensome.

The Administrative Burdens Reduction Programme, which is part of the Government’s regulatory reform efforts, was developed to reduce the cost to business of providing information to demonstrate their compliance with regulations. The Programme has provided a new focus and impetus to Government efforts to reduce the burden of regulation, but delivery of the intended objectives is a challenging and complex task.

The Government has measured the administrative burdens on business, which are estimated to cost nearly £20 billion. Departments will seek to reduce these burdens by at least 25 per cent by 2010 and have published plans outlining over 500 simplification measures to progress towards their targets. The Government’s choice of targets followed the precedent set by Danish and Dutch Governments.

A National Audit Office survey of 2,000 businesses has revealed that, while the majority of businesses understand the purpose of regulation, 60 per cent believe the level of regulation in the UK is an obstacle to the success of their business, and 85 per cent are not confident that Government will succeed in reducing regulatory burdens. This survey will form the baseline against which changes in business perceptions of the burden of regulation will be measured.

The Government believes the Programme will allow businesses to use resources spent on complying with regulations on more productive activities, thereby promoting innovation and, ultimately, contributing to faster productivity growth in the UK. The effect of regulation on productivity levels has, however, not been conclusively established. The NAO is calling on the Better Regulation Executive to prioritise work to explore this link, and to consider how the overall impact on UK businesses’ productivity will be assessed.

Sir John Bourn, head of the National Audit Office, said today:

“There is no certainty that the Administrative Burdens Reduction Programme will deliver its intended objectives. For regulatory reform to succeed, departments must understand business and measure and communicate results. So far, they have made a pragmatic start. Businesses, however, are not convinced that the programme will make a real difference to them. I will revisit this to check on progress.”
 

Notes for Editors

  1. This year’s examination of the Administrative Burdens Reduction programme focused on the Better Regulation Executive and the four departments that are responsible for a majority of business regulation: communities and Local Government, the Department for Business, Enterprise and Regulatory Reform, HM Revenue and Customs and the Health and Safety Executive.
     
  2. The NAO conducted a survey of 2,000 businesses to track businesses’ perceptions of the burdens of regulation and the impact of departmental initiatives to reduce administrative burdens. The survey will be repeated in future years to test the extent to which the Programme is delivering real improvements for business. This year, our survey focused on the five areas of law that impose the largest administrative burdens: Planning law; Employment Law; Company Law; Tax Law; and Health and Safety law.
     
  3. This report is the second of two major NAO reports on the progress of regulatory reform within government. Regulatory reform covers reducing administrative burdens, Impact Assessments and improving the performance of regulators. On 11 July we published our ‘Evaluation of Regulatory Impact Assessments, 2006-07’ report. Taken together, our reports provide an overview of the two major parts of regulatory reform in Government.
     
  4. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
     
  5. The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office which employs some 850 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.
     

Press Notice 37/07
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