Red tape costs business €500m a year

Red tape is costing Irish business and the Irish economy up to €500 million each year, a new report is expected to reveal.

The report from the Business Regulation Forum, which will be published today, is understood to be critical of the administrative and regulatory burden on Irish business which it says is too high and is affecting Ireland's competitiveness in the international economy.

The Business Regulation Forum , which was established in 2005 by Minister for Enterprise, Trade and Employment Micheál Martin to advise on regulatory matters impacting on business, is also expected to conclude that the burden of red tape and regulation falls disproportionately on small and medium-sized enterprises (SMEs) and that any burden reduction programme therefore has an especially beneficial effect on smaller firms.

By reducing duplication and making information flows more simple and efficient, reducing the administrative burden has the potential to improve public sector efficiency significantly, the report is expected to conclude.

It is thought the report will highlight a number of priority action areas to improve the regulatory environment for business as part of an administrative burden reduction programme which could save business €500 million annually.

That programme would focus on five key areas where regulation is most burdensome:

tax;

health & safety;

environmental regulation;

requests for statistical information;

employment and company law.

The report is based on submissions received from Irish businesses, dialogue with key stakeholders, in-depth research on the impact of regulation on business in Ireland and research on international developments in better regulation.

The forum, which is chaired by AIB's Donal de Buitléir, investigated an administrative burden reduction methodology called the Standard Cost Model which was developed in The Netherlands. It is understood to be calling for this model to be introduced to measure the burdens within the five key areas identified, as well as benefits achieved.

It is likely that a central co-ordinating body will be recommended to manage the programme which will be given a clear time frame. To ensure the success of the process, it is likely to recommend that people should be assigned to the project in each relevant Government department or agency to carry out the day-to-day simplification work.

The European Commission has identified better regulation, particularly burden reduction, as a top priority for improving competitiveness in the Lisbon Growth and Jobs strategy, with a commitment to reduce the administrative burden of European regulation by 25 per cent by 2012.

Reducing administrative burdens by 25 per cent, as is being done in The Netherlands, Britain, Denmark, Germany and other countries, has the potential to benefit the economy by almost 2 per cent of GDP.