Dti Can Cut Red Tape By £1 Billion - Can You Help Do More?

29th November 2005

Trade & Industry Secretary Alan Johnson today published details of DTI's developing simplification plan and set out how the Department will deliver over £1 billion of regulatory savings by 2010. The plan will help DTI deliver a new 25% target for reducing administrative burdens as announced by the Prime Minister at the CBI conference today.

The Secretary of State for Trade and Industry called on businesses,large and small, to work with DTI in developing simplification proposals as well as submitting their ideas for cutting red tape via http://www.dti.gov.uk/simplify

The draft simplification plan covers all areas of DTI policy. It includes sweeping changes to make company law more flexible as wellas easier to understand, saving business over �643m in the next five years; transforming the way key agencies such as Companies House and the Patent Office operate through deregulation and simpler electronic filing, registration and search systems. These will save business a further £230m over the same period.

It also features work to cut the burden of company reporting requirements by replacing the Operating and Financial Review with a simpler Business Review in line with the minimum requirements of the EU Accounts Modernisation Directive.

DTI is also leading the way in implementing the Hampton Report's recommendations. A pilot in the retail sector is already working to cut the number of routine inspections for business by pioneering risk-based approaches. This means shifting attention away from the majority of decent complying businesses and onto those that present the greatest risk.

This is part of a wide-ranging programme on consumer law which includes the review of EU Consumer regulation and the recently announced work on Sunday Trading and setting up the Consumer and Trading Standards Agency.

There is also a new programme of work on employment law which aims to simplify rules and improve guidance in those areas business have identified as being difficult to understand. This includes work onthe statement of employment particulars, the redundancy law framework, the maternity pay and leave regime, targeted enforcement and inspection in keeping with Hampton principles, and confirms a review of dispute resolution procedures.

The draft plan, published on the DTI website at http://www.dti.gov.uk/simplify also includes plans to ensure that future changes to the law are packaged so that business knows exactly what initiatives are coming and when. This in itself is expected to save business nearly £100m over five years - or £600 a year for a small firm. The award winning website www.businesslink.gov.uk will also be enhanced to help businesses, particularly small firms, to understand regulation including what does and does not apply to them.

Alan Johnson said: "DTI will be a leader on the Government's better regulation
programme. The draft Simplification Plan I am publishing today shows how we will deliver over £1 billion regulatory savings to business by 2010 with more to come as we develop our ambitious forward programme. This will be a rolling plan, updated and published regularly.

"We are working closely with business in developing the DTI Simplification Plan and need their help to make it even stronger. We want businesses to talk to us about the changes they want to see."

David Frost, Director General of the British Chambers of Commerce said: "Employers warmly welcome this commitment to cut over £1bn of regulatory burdens. Complicated and costly regulations are one of the main barriers to business growth, especially for smaller companies. Employers will now be looking for the Government to fully implement its programme to reduce the burden of complying with regulations."

William Sargent from the Better Regulation Executive said: "DTI's draft simplification plan includes measures to decrease the cost of doing business with government, alongside plans to simplify regulation and rationalise inspection. This will make a real difference to every business in the UK.

"This draft plan goes beyond the £1bn savings to business that DTI promised last year. I congratulate DTI for going public and for asking for feedback on what more can be done."

DTI set itself a target to deliver £1 Billion regulatory savings by 2010 in its 5 Year Plan published November 2004. It was the first Govt department to announce such a target. It has today announced a complementary target aimed more specifically at measuring reductions in administrative burdens. DEFRA and HSE have announced similar targets.

In April 2005 the Government announced a radical package of regulatory reform by accepting the recommendations of reports by Philip Hampton 1 and the Better Regulation Task Force led by Sir David Arculus 2. Hampton recommended reducing burdens on business from inspection and enforcement through a risk-based approach. The BRTF Report recommended reducing regulatory burdens by targeted
reductions in administrative burdens, simplification of the stock of current regulation and a "one in, one out" approach to new regulation.

Targets for reducing administrative burdens will be set across Government next year. DTI, DEFRA and HSE are leading the way. The BRTF called for departmental rolling simplification plans to be developed. These are now in preparation across Whitehall for publication in 2006. DTI, DEFRA and the HSE are publishing draft plans now for stakeholders to comment on.

DTI wants business views on regulatory reform. It has already launched a call for business ideas for its developing plan. Its Ministerial Challenge panel, chaired by Barry Gardiner, at which business representatives challenge DTI officials directly on policy-making and up-coming policy and regulation.

How the £1 Billion target will be met: summary of headline items:
Company Law Reform Bill: £643m over 5 years.
Sweeping changes to simplify and improve company law making it easier to understand and more flexible - especially for small businesses.

OFR - simpler "Business Review" to replace OFR £154m over 5 years

Companies House: new e-government services and £217m over 5 years
harmonised joint filing.

Commission for Equality and Human Rights: £17m over 5 years.
one-stop shop delivering high quality help and advice.

What this might mean for individual firms:

• A small firm could expect to save 10% of the time taken to deal with new regulations through common commencement dates for government regulations - almost £600 a year per firm.
  
• A small privately owned company will benefit from greatly simplified corporate governance and streamlined decision making: no requirement to appoint a company secretary or hold an Annual General Meeting, and a wider ability to use written resolutions rather than meetings.
  
• A large public company, if its shareholders agree, will be able to cut costs by sending electronic rather than paper versions of annual reports. All companies will now be able to use their websites and e-mail more freely for communication with their shareholders, potentially saving up to £400,000 per mailing.
  
• Regulatory reforms have made it easier for a firm to make a patent application and keep patents in force.
  
• The new web based application form for trade marks will enable forms and individuals to make and submit their applications on line, reducing administrative time and costs.
  
• Through simplifying and consolidating weights and measures rules, a large food retailer could expect to save approximately £150,000.

Businesses can view the full draft Plan and submit views on how DTI can further simplify its regulations through our portal http://www.dti.gov.uk/simplify or e-mail us direct to simplify@dti.gsi.gov.uk

Within DTI the Small Business Service will be working alongside policy makers to ensure the needs of smaller businesses are taken into account.