Regulatory burden on Company Directors has increased to £37bn a year, says IoD

Dated: 10 February 2011

In a report published today, the Institute of Directors (IoD) reveals that the amount of time company directors spend each week doing paperwork related to regulatory compliance has gone up from 13 hours a month in 2009 to 17 hours a month in 2010. A typical director would have to work continuously from 1 January until 9 February to complete their annual administrative burden. 10 February is therefore Regulation Freedom Day for company directors.

Despite some positive noises on regulatory reform, the Government has yet to deliver any meaningful deregulation. This is concerning given the scale of the problem. We, therefore, urge the Government to get on with regulation reduction, particularly in relation to employment law. The Government has to make it easier for firms to take on new staff if we want the private sector to create new jobs to offset impending job losses in the public sector.

Key points:

  • We have calculated the cost of regulation using an innovative approach. Instead of relying on Government figures on the cost of regulation, such as regulatory impact assessments, we have gone to the heart of the issue and quantified the working hours that company directors spend each day handling Government regulation. We have then costed those working hours using remuneration data.
  • Directors say that on average they spend 17 hours a month on the paperwork associated with government regulation.
  • The monetary cost of directors undertaking these 17 hours, when annualised across the number of private enterprises in the UK, was £36.8bn in 2010, up from £28.2bn in 2009.

Commenting on the report, Miles Templeman, Director-General of the IoD, said

“Instead of building up their businesses and creating new jobs, the UK’s entrepreneurs are spending over a month each year handling Government red tape. Some of this burden has to be lifted if we want the private sector to grow and create jobs to offset redundancies in the public sector.

“Significant deregulation of employment law must be on the agenda. We know this is contentious, but we’ve reached a point where excessive red tape is stopping many micro-businesses from taking on their first employee. This doesn’t benefit anyone.”

To read the report in full, click here: Regulation Reckoner

ENDS

Contact Points

Edwin Morgan
Media Relations Manager
Institute of Directors, 116 Pall Mall, London SW1Y 5ED
Tel: +44 (0)20 7451 3392
Mob: +44 (0)7814 386 243
Email: edwin.morgan@iod.com
Website: www.iod.com/policy

Notes to editors

  • The IoD (Institute of Directors) was founded in 1903 and obtained a Royal Charter in 1906. The IoD is a non-party political organisation with upwards of 45,000 members in the United Kingdom and overseas. Membership includes directors from right across the business spectrum – from media to manufacturing, e-business to the public and voluntary sectors. Members include CEOs of large corporations as well as entrepreneurial directors of start-up companies.
  • The IoD offers a wide range of business services which include business centre facilities (including ten UK regional centres [three in London, Reading, Birmingham, Cardiff, Manchester, Nottingham, Edinburgh and Belfast] and one each in Paris and Brussels), conferences, networking events, virtual offices and hotdesking, issues-led guides and literature, as well as free access to business information and advisory services and a comprehensive Information Centre. The IoD places great emphasis on director development and has established a certified qualification for directors – Chartered Director – as well as running specific board-level and director-level training and individual career mentoring programmes.
  • In addition, the IoD provides an effective voice to represent the interests of its members to government and key opinion-formers at the highest levels. These include ministers, constituency MPs, Select Committee members and senior civil servants. IoD policies and views are actively promoted to the national, regional and trade media.
  • For further information, visit our website: www.iod.com
  • You can also keep up to date with the latest views from the IoD on twitter.com/The_IoD and at blogs.iod.com