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Tackling business red tape

HR News |  16/05/2012
Tackling business red tapeRed tape is one of the undisputable issues facing the business world at the moment. As companies struggle to make ends meet, dealing with paperwork and an abundance of regulations can affect their efficiency and ultimately their bottom line.

However, in recent months, as the UK targets economic recovery, the government has taken a number of steps to combat the amount of red tape that businesses face.

Starting with the Budget back in March, the government conducted what was referred to by some as a "bonfire of red tape" with chancellor George Osborne announced the scrapping of a number of pieces of legislation.

Among those to be given the shop were the 'time to train' regulations which allow staff working for companies employing less than 250 people the statutory right to request time off to study or train.

Dual discrimination regulations were also scrapped and Mr Osborne pledged a number of other administrative "simplifications such as moratorium on all new regulations for companies that employs fewer than ten people and for new startups."

In total, the Department for Business, Innovation and Skills stated that the changes would save British businesses somewhere in the region of £350 million a year.

However, while on paper the changes look good, a number of commentators have suggested that they did not go far enough.

John Cridland, director general of the CBI, said that small businesses in particular will have been left disappointed by the Budget.

"There needs to be much greater urgency to the government’s deregulatory agenda. We must bring down the barriers to companies hiring staff and creating new jobs," he noted.

The government's second chance to highlight the work it plans to do on cutting red tape came in the Queen's Speech earlier this month.

The Enterprise and Regulatory Reform Bill which was outlined in the speech detailed plans to overhaul the tribunal system with the aim of giving employers more confidence to sack people when they have legitimate reason.

It also contained measures aimed at limiting inspections on firms.

The CBI's Mr Cridland gave a cautious welcome to the regulatory reforms outlined in the Queen's Speech, stressing that while they were a step in the right direction "the jury's out" at the moment.

“We hear a lot about regulatory reform, but the big prize for businesses would be to major on the new power for ‘sunset clauses’ on regulation and regulators. Every new bit of regulation should be time-limited and then reviewed," he said.

“It is employment regulation where the shoe pinches for growing firms. We await the government’s bold reforms in this area."

Simon Walker, director-general of the Institute of Directors, also noted there must be more "drastic measures to cut costly regulation and continue to tackle the deficit", stating that it is what in the bills rather than the number of them that matters.

There were also concerns that some of the measures announced in the speech will create even more red tape headaches for businesses, in particular the confirmation of plans for fathers to be able to share parental leave.

Moving forward, mothers and fathers will be able to share the time off following the birth of a child, with mothers able to transfer as much as nine months of a year's parental leave to the father.

Parents can use this leave as they prefer and even opt to take the time off simultaneously which could cause huge problems if they work in the same company.

John Longworth, director general of the British Chambers of Commerce, said: "On balance, business will welcome some of the Government's proposed legislative measures, but express serious reservations about others. Positive steps such as reform to employment tribunals and red tape reductions could be undermined by complex new burdens around shared parental leave, for example."

Ultimately, as the UK faces a double dip recession it has never been more important for businesses to grow, providing much-needed jobs and helping the economy return to stability.

However, for this to be achieved commentators suggest there is a pressing need for the government to expand on the work already done in the past six months and take swift action to cut red tape.

Posted by John Lynes


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