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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.

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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.

“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.”

Sir John Bourn, head of the National Audit Office


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