Businesses face €631m bill for dealing with 'red tape'

BUSINESSES FACE administrative costs of €631 million dealing with information required under employment, health and safety and company law.

This is according to a report into the cost of “red tape” at companies commissioned by the Department of Enterprise.

The administrative burden on businesses was €424 million, EPS Consulting concluded in the report for the Department of Enterprise, Trade and Innovation, where Batt O’Keeffe is the Minister. The Government is targeting a 25 per cent reduction in the cost of red tape by 2012.

The consultants defined administrative burden as the time and cost associated with complying with regulations, such as preparing reports and making returns to be submitted to Government departments, agencies and regulators.

Meeting health and safety regulations was found to be the highest administrative cost, followed by obligations under company law and then employment law.

Health and safety accounted for 60 per cent of the administrative costs and 57 per cent of the administrative burden facing companies, the EPS report said.

Some €387 million of the overall administrative cost related to information that companies had to provide under health and safety regulations, followed by €154 million under company law and €89 million under employment law.

The administrative burden amounted to €244 million under health and safety regulations, €116 million under company law obligations and €64 million under employment law regulations.

The single largest administrative cost facing a business was the need to provide a risk assessment under health and safety reporting obligations which amounted to €167 million, followed by a cost of €145 million for providing and compiling information for a safety statement.

Some €125 million and €109 million of these items respectively were deemed to be administrative burdens to companies, EPS Consulting found.

Compiling records on working time was found to be the highest administrative cost totalling €68 million under employment law.

The highest administrative cost under company law was the requirement that firms must detail all directors on business letterheads, which amounted to €66 million and was deemed in full to be an administrative burden.

This was followed by annual meetings and notices for meetings, which totalled €52.7 million, some €19 million of which was considered an administrative burden.

Companies also found that maintaining a register of members and directors as “unnecessary red tape”.