Transport and storage industry faces 2.7 billion bill for regulation

Smaller businesses in the transport and storage industry are among those losing more than 2.7 billion every year due to government red tape, new figures have shown. Research carried out by business lobby and support group the Forum of Private Business (FPB) has found that Britains small and medium-sized transport and storage firms contribute towards a 2,764 million bill spent each year complying with legislation.

The figure, drawn up using feedback from members of the not-for-profit FPB, is based on the amount of company time, and therefore money, spent on government-imposed bureaucracy. It was revealed by the FPBs quarterly Referendum survey of members and also includes the costs incurred by several other types of consumer-orientated businesses.

This latest issue of Referendum, which focused on the cost of compliance, found that recession-hit transport and storage firms are forced to spend an average of 33 hours of company time each month on form-filling and paperwork. Those with nine or less employees spend an average of 29 hours, those with between 10 and 50 employees spend around 41 hours and firms with up to 249 workers devote approximately 131 hours.

In terms of costs, complying with health and safety legislation alone was found to leave those in the trade contributing towards a 606 million bill each year. The cost of complying with employment legislation was put at 687 million per year, comprised of dismissals and redundancy (70 million), absence control and management (106 million), maternity (66 million) and disciplinary issues at 125 million. The costs associated with legislation on employee holidays and any other remaining areas of employment legislation were put at 319 million.

The legislation surrounding waste and the environment was calculated to cost 318 million, equality and diversity 149 million, ISO and industry standards 211 million, tax 510 million and building and property 284 million.

FPB member Ross Hunter, from family-run firm Hunters Coach Hire in Midlothian, Scotland, described the raft of rules and regulations facing transport firms as absolutely shocking.

He said: Its terrible. I cant put a figure on the amount of time we spend complying with it all but its silly. Its gone too far.

Small companies cant afford all these different things its made life very, very difficult and theyre coming out with new stuff all the time. I dont know how the government have got away with what they do.

Small businesses in the transport and storage industry were placed under the UK SICs TRAD category in the Referendum results, which also includes other businesses such as garages, restaurants, hotels and transport firms.

Those under the TRAD category in the South East were found to face the biggest annual bill for regulation at 372 million, followed by London at 353 million, the North West at 306 million and Eastern England and the South West, which were both found to face costs of 263 million. The figure for the West Midlands was placed at 236 million, while Yorkshire and Humbersides annual bill was 231 million, with 216 million for Scotland, 203 million for the East Midlands, 136 million for Wales, 95 million for Northern Ireland and 91 million for the North East.

Out of four sector headings in the research based on the SIC, the 2.7 billion overall cost of compliance for smaller businesses in the TRAD category was the second highest. The price was put at 1,157 million for construction, 1,230 million for manufacturing and 4,151 million for the services sector.

The Referendum found that, with external costs taken into account, regulation costs the UKs smaller business employers almost 12 billion per year. (11,920 million) The FPB is now urging the Government to cut down on red tape for small businesses and believes that reducing the time and cost of complying with legislation must not be sidelined, particularly as many firms are struggling to survive because of the recession.

FPB Policy Representative Matt Goodman attended a meeting of the Better Regulation Executive (BRE) on Friday (26 June 2009) to help put across the lobby groups calls for the legislative burden on smaller businesses to be reduced.

He said: As part of a new department with a broader remit, the BRE must continue to put the smallest businesses at the forefront of its plans to change the culture of bureaucracy in the UK.

Our research shows that complying with red tape remains one of the major cost burdens facing smaller businesses, swallowing up valuable time and money that could be used more profitably elsewhere.

Mr Goodman added: In addition, at a time when protecting both workers and businesses should be a priority, regulations are increasingly burdensome as businesses take on more staff.

Representatives from the BRE have been in discussions with small businesses from across the UK hoping to meet a target of saving 3 billion per year via reducing bureaucracy. While welcoming this engagement, the FPB believes that more must be done in order to meet this target.



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