21 June 2010

Council regulators can and should be a helping hand to businesses struggling during the recession says Derek Allen.
At a time of economic crisis, with businesses – particularly small and medium size enterprises – struggling to survive, let alone thrive, probably the last thing you would expect them to want is a visit from a council regulator.
 
"It is not that regulations are a total anathema to businesses, it is more about how they are enforced. "
Surely, this will be the final straw that breaks the camel’s back, and it is a time for less regulation and fewer interventions, from either local or central government.
My many conversations with business leaders, the organizations that represent them and the regulators themselves, allow me to feel quite well informed on these matters.
 
So you may be surprised to hear that many SMEs, once they have got over the initial fear that the inspector, be she/he an environmental health officer, trading standards officer or licensing officer, is not there to shut them down or just prosecute them, and that they are there to help them to comply with the most important and highest risk regulatory requirements, they usually welcome the visit.
 
Most interactions and interventions from council regulatory services are positive ones, where both parties work to find cost-effective solutions to regulatory compliance. Colleagues working in the sector, often cite the array of ‘voluntary’ assurance schemes and the extremely high quality type standards imposed by bigger businesses, for example supermarkets, who can ‘gold plate’ requirements that far exceed any regulatory requirements.
 
This can add significant costs to the business making it very difficult for SMEs to meet these non-statutory requirements, leading to the SME either not bidding for the contract in the first place or sometimes having to pull out of the contract altogether.
 
The regulations that most often keep these entrepreneurs awake at night are usually centred around prescriptive employment law, tax requirements and returns (especially VAT), and occasionally health and safety in the work place. Interestingly, the only ones that councils (and the HSE) have direct responsibility for enforcing are the health and safety regulations.
 
So it is not that regulations are a total anathema to businesses, it is more about how they are enforced. What they want is a level playing field, where the principles of better regulation are properly and effectively applied. For example, they are enforced in a proportionate way, carefully targeted, and are risk-based and intelligently led. They don’t expect a ‘one size fits all approach’ and welcome regulatory services being tailored for the particular business or sector and locality.
The challenge to councils in a really tough economic climate is to first prove that the alleged great untruth ‘we’re from the council and we’re here to help’ is in fact true and that not only those services provide genuine support and added value to businesses in their localities, but they target and focus on the real rogues, ie those outside the system, not on council databases, and have no intention of complying with the law.
They rarely trade on the high street and therefore regulators can’t just pop in and take a look see.
 
However, this is difficult, challenging and uncomfortable territory, as some of these characters are serious criminals who can resort to unsavoury tactics to avoid being caught. But councils have a good track record on this and it is imperative they are supported and recognised by their senior managers, local and national politicians and the public. And of course the media, who usually prefer to cover the negative stories like ‘elf and safety gone mad’, rather than the many positive regulatory activities councils are delivering up and down the country.
 
At Local Government Regulation, we will continue to provide support to these services and contribute to their ongoing improvement – for example through the regulatory excellence framework. We will work with the key business organisations like the BCC, Federation of Small businesses and the British Retail Consortium, ensuring councils are more effectively supporting the businesses in their areas – who, when all is said and done, are the absolute backbone of both the local and national economy, and quite frankly our future recovery depends on them. 
 
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