No delay implementing Anderson Review
The Institute of Chartered Accountants in England and Wales (ICAEW) has called on the Government to accelerate the implementation of the Anderson review recommendations. The review calls for improving advice to small companies, but believes that it could have gone further to help SMEs at a time when they are especially struggling.
The Anderson Review, which was issued at the beginning of the year, revealed that three quarters of SMES struggle to find information about which regulations apply to their business and that as many as half do not use any source of advice on regulation. Recommendations made in the Anderson review include a thorough assessment of www.business.gov.uk and a tailored, insured advice helpline on employment and health and safety regulations which provide free access for SMEs for one year from the point of first contact.
Clive Lewis, Head of SME Issues at the ICAEW, said:
“A 2007 Better Regulation Executive report (‘Regulation and Business Advice’) suggested businesses spend at least £1.4 billion each year on advice to help them comply with regulation. The Anderson Review suggested improved guidance and increasing compliance could reduce businesses costs by up to £841 million a year and save £40million in reduced employment costs.
“We welcome the Government’s acceptance of the need to improve its guidance, particularly the intent to ensure it contains a positive statement of what users can expect from it, its scope and limitations. However much of the government’s response to Anderson is simply pushing forward actions to the next revision of the Code of Practice on Guidance, which is due for review before July 2009. The current Code of Practice has a let-out “Government departments and their agencies should follow the Code, unless there are very good reasons to depart from it” so this is not re-assuring.”
The ICAEW’s Enterprise Survey regularly shows that health and safety and employment regulation are among the areas small businesses find the most challenging with 53% of UK businesses saying that the regulatory and taxation environment in the UK is not business-friendly. Disciplinary, dismissal and grievance procedures are considered to be most burdensome aspect of employment legislation.
The Institute believes that the forthcoming Budget is another opportunity where government can be restrained in adding unduly extra regulatory pressure to small businesses. Changes in taxation should require the minimum of additional administrative work for business.
Mr Lewis added that:
“The motivation for this whole exercise was to save businesses the cost of taking advice and improving their compliance. Businesses get advice on regulation from solicitors and accountants. These are their ‘trusted advisers’. Until businesses can fully trust and rely on government guidance they will continue to seek advice from their own advisors.”