With the deficit casting a monstrous shadow over the nascent economic recovery, some SMEs have shown as much concern for the efficiency of the public sector as their own when asked about red tape.
As Vince Cable gets to work on reducing the legislative burden on business, BusinessWings asked entrepreneurs and business executives which piece of legislation they’d like to streamline or abolish.
Strong feelings were expressed that public sector managers labour under even more onerous regulatory constraints than their private-sector counterparts. Jobseekers also attracted sympathy for the convoluted process of finding work.
Other regulations SMEs want Cable to put on the slate for amendment or the axe include tax avoidance legislation, staff dismissal procedures, benefits and expenses reporting, health and safety legislation and planning regulations.
Mark Prisk, the small business minister who urged business owners to report legislation they found particularly burdensome to his department, would be well advised to read the following comments:
The current risk-assessment process means you have to spend so much time assessing health and safety and risk that it restricts expansion and flexibility
Sara Tye, Redhead PR
“One of the rules in setting up a limited company doesn’t seem to make sense to me. For a number of businesses starting up, the first few years mean the business absorbs cash rather than generating it.
“So the business founder is not likely to take cash out of the business. Yet a P11D has to be prepared, declaring expenses and benefits, even if none have been taken.
“But in order to prepare a P11D, there must be a payroll system in place. If no salaries are being paid, there is no need for a payroll system to be set up. And yet the requirement to complete a P11D requires a payroll.
“It really doesn’t seem logical and just creates an extra burden on start-up businesses. It requires more fees to be paid to accountants at a time when a business is trying to keep costs down.
“Small businesses should surely be encouraged and this piece of nonsense is a burden that could very easily be sorted out? It doesn’t seem like joined-up thinking.”
Louise Reynolds, Property Venture director
“Simplifying jobseekers’ route back to work. It’s desperate out there.
“Yet, there are signs of positivity – we see the Government listening to UK business. There’s a push for ‘citizen involvement’ within the public sector to use British private-sector technology to facilitate real solutions with real savings. They want to work with smart smaller companies, so in turn aiding growth and employment.
The Google economy, too, allows Brits to compete globally by reducing development costs and enabling agility. www.careerplan4.me helps people get back to work, taking up less Jobcentre Plus administration, therefore saving taxpayer money. Now there’s a win.”
Richard Banks, careerplan4.me co-founder
“Anything where administration takes precedence over what's best for the business. IR35 [legislation aimed at eliminating tax avoidance among self-employed], for example, discourages the use of freelancers even when that might be the most sensible choice of contract.
“Or statutory dismissal procedures, where the termination of an employee's contract can cause huge amounts of work and stress for both parties. Employers should be able to employ (or un-employ) who they like for the good of the business.”
Ciaron Dunne, Genie Ventures
“Tendering for contracts in the public sector. As a small SME we have a 100% success rate in developing managers and people. We have even had a trial with one team in central Whitehall.
“Yet despite the fact that they would love to work with us further, they are tied into large contracts for the supply of HR, as it is forced upon them from other departments. As a result the public sector continues to be ripped off and remain in the ancient development world of the likes of Belbin and exec coaching when they should be leading the way in maximising effort and people.
“The age-old hurdles and paper and points system is a joke. The public sector senior teams need to have the freedom, like in the private sector, to respond quickly to changes and be flexible to take up and respond to opportunities.
“A budget rather than a need to tender for a paperclip. With our programmes they could probably half their top and middle management headcount whilst maximising the delivery success and confidence of those left behind.
“Instead they are sat filing paperwork. Such a load of red tape where Britain should actually be cutting it and leading the way.”
Liz Villani, Courageous Success
“Had I been asked this question three weeks ago I would have certainly abolished HIPs, at the same time shouting Hallelujah, good riddance to bad rubbish. Now that it has been all but extinguished the energy performance report is still an unnecessary vestigial product of the dithering, bureaucratic and thoroughly confused Labour administration.
“Now that the coalition have honoured their electoral pledge, enemy number two has to be the money-laundering requirements that estate agents have to observe. Once upon a time, money-laundering may have been a problem in some obscure cases, but it certainly wasn’t rampant, and now instead of chasing just the infinitesimal percentage of rogues, you have to administrate 100% of decent clients.
“It’s administration gone mad; it slows down considerably the time taken to market a property. Clients hate it, in common with estate agents, and baulk at the administrative hassle it brings and do not see the need for it. The net result is fewer properties appearing on the market, which pushes up prices.
“With few new properties being built as a result of the frustrating planning process, together with the credit crunch, in order to keep property price inflation within a tolerable margin so as not to further disenfranchise first time buyers, maintaining and increasing the supply of new homes whilst demand remains robust is the order of the day.
“Parts of the Estate Agents Act also act as a break and between all these three attenuators it is no wonder that if you are not on the property ladder, the process becomes all the more insurmountable.
“I would also like a major reform of the planning process since very often a planning application by a developer is seen by some planning departments as a salvo from the enemy which has to be stopped or frustrated at any cost.
“Worthy planning applications are a vital part of a healthy and vibrant property market and the voices of do-gooders and NIMBIES should be muffled. I’m not condoning obscene and audacious planning applications by any means, but even meritable ones suffer more than their fair share of frustration.”
Trevor Abrahmsohn, Glentree International MD
“I would like to see a fresh approach to health and safety. The current risk-assessment process means you have to spend so much time assessing health and safety and risk that it restricts expansion and flexibility. We have created an injury and claim culture and ensured we are all open to potential personal injury claims that weren’t there before.”
Sara Tye, Redhead PR
