Red tape costs small construction firms £1.1bn

Small construction businesses lose more than £1.1bn a year due to government red tape, new figures from the Forum of Private Business (FPB) have shown.

The FPB found that construction SMEs spend £1,157m on complying with legislation each year.

The study also found that recession-hit construction companies are forced to spend an average of 37 hours of company time each month on form-filling and paperwork.
 
And it calculated that complying with health and safety legislation alone costs smaller construction firms £277m a year.

Other major annual costs were:

• Employment legislation - £238m
• Waste and the environment - £104m
• Equality and diversity - £25m
• Industry standards and ISO - £111m
• Tax - £219m
• Building and property - £139m
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The FPB’s policy representative, Matt Goodman, called on the government's Better Regulation Executive (BRE) to help reduce small businesses' burden.
 
He said: “As part of a new department with a broader remit, the BRE must continue to put the smallest businesses at the forefront of its plans to change the culture of bureaucracy in the UK.
 
“Our research shows that complying with red tape remains one of the major cost burdens facing smaller businesses, swallowing up valuable time and money that could be used more profitably elsewhere.”