Opinion Former Article

FSB: Regulation watchdog needs sharp teeth

The independent body set up to scrutinise new Government regulations needs sharper teeth to defend small businesses against poorly framed regulations, the Federation of Small Businesses (FSB) has warned.

Marking the first anniversary of the Government’s moratorium from new domestic regulation for micro businesses, the FSB has published a report which argues that the Regulatory Policy Committee (RPC) needs more powers to scrutinise performance, advocate regulatory reform and act as an ombudsman. 

The report, entitled ‘Regulatory reform: where next?’, also calls on the Government to look at models from the USA, Australia and the Netherlands to see what structural changes could be put in place to improve to UK’s regulatory system.

John Walker, National Chairman, Federation of Small Businesses, said:

“Poorly designed, ill-thought out regulation isn’t just an irritation for small businesses, it costs in time, money and may not even achieve what it set out to. It’s good that the Regulatory Policy Committee is there to clamp down on this sort of bad regulation, and we welcome the Government’s progress so far on this issue, but the RPC needs real powers if it is to drive change and challenge Whitehall culture. It needs to be able to scrutinise performance in a transparent way and be a powerful advocate for Government-wide change.”

While the FSB welcomes the Government’s regulatory reform programme so far, FSB figures show that in the last year four in 10 small firms saw the cost of complying with regulation increase and six in 10 said the cost of complying with regulation costs more than £1,000 a year. And despite numerous initiatives, only one in three impact assessments for new regulations show the regulations are fully fit for purpose. Further, the UK ranks 83 out of 142 for the compliance burden it places on businesses.

The FSB believes that this performance could be improved if the RPC was able, for example, to ensure that issues it identifies in impact assessments were thoroughly addressed by the relevant Government department, and it was able to publish its opinions on all impact assessments.

The RPC should be given powers to:

Scrutinise: by allowing it to publish its opinions and produce annual reports on department’s performance on all regulatory reform measures

Advocate: suggest, advise and explore alternatives to regulation, special measures or exemptions for micro businesses and other measures that will help improve regulation for small businesses

Act as an ombudsman: be a single point of contact for small businesses if problems arise


Notes to Editors

The FSB is the UK's leading business organisation with around 200,000 members. It exists to protect and promote the interests of the UK’s Real-Life Entrepreneurs who run their own business. More information is available at www.fsb.org.uk

The micro-business moratorium from new regulation was launched at the FSB’s National Conference in Liverpool in March 2011. The publication of the regulation paper marks a year anniversary. To find out more, go to www.fsb.org.uk/News.aspx?loc=pressroom&rec=7013

In the Global Competitiveness Report 2011-2012, World Economic Forum 2011 it found that the UK ranks 83 out of 142 countries for the compliance burden it places on businesses. www.weforum.org/reports/global-competitiveness-report-2011-2012

The FSB surveyed 4,467 members of the ‘Voice of Small Business’ Survey Panel in December 2011 and received 1,674 responses. The study was undertaken by Research by Design on behalf of the FSB.
To view the report, ‘Regulation: where next?’, please go to www.fsb.org.uk 

Media contacts

Prue Watson: 020 7592 8121 / 07825 125 695 prue.watson@fsb.org.uk
Sara Lee: 020 7592 8113/ 07595 067068 sara.lee@fsb.org.uk

For regional FSB contacts please go to www.fsb.org.uk/regions



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