Consultation of stakeholders in the shaping of small business policy at national and regional level
Comments from ACCA
September 2004
ACCA is please to comments to the online consultation on the above. Over half ACCA's 100,000 members work in or service SMEs (Small and Medium-sized Enterprises). We therefore have a special interest in ensuring that their views are represented within Government.
We have responded to the online questionnaire, but were disappointed that there was no space provided for additional comments. We appreciate that an online consultation provides a simple framework for gathering and analysing responses, particularly from different countries. However, we believe that it is important that an option be made available for respondents to provide additional comments or have the choice to submit a written response based on the questions provided.
The UK has a tradition of well-respected consultation. In 2002, the Organisation for Economic Cooperation and Development (OECD) reported that UK regulatory procedures are consistent with international good practices for transparency, flexibility and accessibility. The recently announced initiative by the Department of Trade and Industry's Small Business Service (SBS) of a Small Firms Consultation Database has the potential to improve consultation, helping to ensure that policy makers take account of the impact which certain proposals may have on small businesses at an early stage of the development process.
However, we consider that the UK Government can and should improve its performance in regard to the periods allowed for official consultations. If professional bodies, trade associations and other representative organisations are to provide the Government with appropriately representative input for these exercises, they have to consult beforehand with their respective memberships.
Usually, the twelve week period is more or less observed. In a number of cases with which ACCA has dealt, however, the period allowed for comment has been significantly less than the supposed standard period and some documents have been entitled �Calls for Submissions' rather than actual Consultation Papers. Where the period allowed for consultation is too short, interested parties may be unable to do justice to the issue in question. This can also give the impression that the Government Department handling the consultation exercise concerned is not wholly serious about considering comments on proposals.
Regulation is a key area for creating the right environment for entrepreneurship and for business to prosper. Evidence clearly demonstrates that small businesses are burdened disproportionately by regulation compared to large businesses, because they lack the resources and the staff to deal with them. In the UK , Regulatory Impact Assessments (RIAs) are intended to ensure legislative policy-makers assess whether regulations impose costs, their scale and whether they are justified by benefits. RIAs are required for any UK or EU proposed legislation that has an impact on businesses, charities or voluntary bodies. UK Government guidance for policy makers advocates a �think small first' approach.
The theory of RIAs is commendable, but evidence suggests that in practice the Government continues to fall short of its own guidelines. Recent research ( Are Regulators Raising Their Game? UK Regulatory Impact Assessments in 2002/3, Ambler, Chittenden, Obodovski, The British Chambers of Commerce, 2004) has found that the quantification of costs and benefits of regulations in RIAs continues to be weak, particularly in the assessment of additional costs to small businesses. Only 7% of RIAs currently quantify extra costs even though 60% of them identify that there are additional costs for business. The report revealed that there is little evidence that departments give serious consideration to alternatives to regulation when considering how to achieve policy objectives, even though the RIA guidelines require that these should be considered first.
We believe it is important to note that while we were able to answer �Always/ Almost Always' to the question in the online survey �Are systematic business impact assessments for legislative proposals carried out by the legislator in your country?', the quality of such assessments is paramount and there are still plenty of areas for improvement in practice in the UK.