Environment for innovation

By | Business
These measures should contribute to the £1.5 billion savings enabling businesses to have more innovation and freedom when running their businesses. Image credit - @kompania piwowarska via flickr.co.uk

Business Minister, Michael Fallon, has confirmed that the government has reduced the total annual net cost to the business of regulation by £1.5 billion. The Statement of New Regulation details all regulation is expected to come into force between July and December 2014, as well as the regulation to be removed: including the regulation under the government’s One-in, Two-out rule and the Red Tape Challenge, which has now implemented over 1,000 deregulatory reforms.

New reforms will look to modernise road transport legislation, reducing administrative costs for business and administrative inconveniences to motorists. Changes include: removing the requirements for motorists to display a tax disc in their vehicle, removing the requirement for fleet firms to hold vehicle registration certificates, and increasing the availability of electronic services used for notifying the DVLA of changes to vehicles. One area, where the reduction is looking to improve, involves giving up to 150,000 micro-businesses access to the same redress system that domestic customers use when a consumer concern takes a long time to be resolved directly with an energy provider. It will ensure that concerns are resolved quickly and at minimum cost to the micro-business

Business Minister Michael Fallon has said: “The government is stripping back unnecessary rules that restrict enterprise and act as a brake on jobs and growth. With £1.5 billion saved to date, we are making good on our promise to free businesses from interference from Whitehall.”

These measures should contribute to the £1.5 billion savings enabling businesses to have more innovation and freedom when running their businesses. Innovation needs a good atmosphere in which to develop. It is definitely a cultural characteristic and must be encouraged and nurtured inside a company. These reductions contribute to setting an environment that encourages people to think in unusual and creative ways.

The reduction is giving more businesses the flexibility to decide whether their accounts should be audited, saving business £300 million a year. One additional area is the extension of the Primary Authority scheme; which gives more firms access to consistent regulatory advice and enforcement, and removes thousands of low risk businesses from unnecessary health and safety inspections.

One area that could help small businesses, is the new freeing of responsible employers from being held liable for workplace accidents and injuries that are totally outside of their control; through reforms to civil liability rules for breaches of health and safety law. Furthermore, these reforms simplify mandatory reporting of workplace injuries for businesses and introduce simple portable criminal records check; which employers can view instantly online. The introduction of early conciliation, which requires employees considering lodging an employment tribunal claim to contact ACAS mediation services beforehand. Early conciliation also saves more businesses the time and cost of facing an employment tribunal, and £24 million per year.

The government is also working with partners in the EU to reduce the unnecessary costs of European legislation, including the Business Taskforce. Ten of the taskforce’s 30 recommendations for reform have already been implemented: including unnecessary bureaucracy around clinical trials, non-financial reporting and environmental impact assessments. Ministers are also changing the way regulation is enforced, putting businesses at the centre of the system through Business Focus on Enforcement reviews. These give business groups the opportunity to demand that regulators reform counterproductive or unnecessarily bureaucratic practices. New reviews into the importation of fresh produce, livestock farms and the export of electronic goods will commence later this year.

Setting an atmosphere, in which innovation is encouraged, is often highly correlated with the long-term success of a company. As businesses save money from this reduction, it challenges them to invest in other areas and create productive atmospheres.

What other methods are there to increase the UK levels of innovation and creativity?

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