Government plans to abolish or simplify more than 3,000 regulations as part of its drive to cut red tape have received a mixed response from the accountancy profession.
The government says that the latest data indicates that its Red Tape Challenge - which asks businesses and the public themselves to identify the rules that hold them back - has saved firms some £300m per annum so far , and is expected to deliver business savings of over £850m a year once all measures are implemented.
Prime Minister David Cameron announced that more than 3,000 regulations have been identified for scrapping or improvement of the 5600 examined via the Red Tape Challenge since 2011, and action has been taken on over 800 of these. Reforms already in place include giving more businesses flexibility to decide whether their accounts should be audited, with the government claiming that the new audit exemptions for subsidiaries will result in annual savings of over £60m.
Further cuts to red tape announced this week include a new online system for recording waste management which will eliminate the need for 23.5 million paper Waste Transfer Notes each year, and details of how 2.1m small companies will be able to file their company accounts to Companies House and HMRC and annual return information once easily online at the same time. Under the proposed Deregulation Bill, currently going through Parliament, there will be a new 'growth duty' on regulators to ensure that regulations do not add unreasonable administrative burdens.
However, ICAEW Head of Enterprise, Clive Lewis, said: 'Government has missed a massive opportunity to reduce business regulation by refusing to include Treasury and tax law within its red tape challenge. Dealing with an overly complex and slow tax system is one of the biggest drains on time, especially for small businesses. Doing something about this would send a strong signal that government is serious about reducing the regulatory burden on businesses.'
In contrast, Suzi Woolfson, PwC partner and head of the firm's private business team, said that cutting red tape in area such as health and safety rules and environmental regulations was important for entrepreneurs who are typically the economy's growth engine, by giving them the confidence to innovate.
'The challenging economic conditions of recent years has seen businesses of all sizes prioritising cost cutting and efficiency. This year, though, we're seeing a change of mindset as Britain's bosses shift their focus to new products and services. With evermore competition from overseas, and technology changing many business models forever, innovation is an economic necessity. Reducing redundant rules gives entrepreneurs the flexibility they need to create jobs and growth,' Woolfson said.