23rd October 2009

Hotel and restaurant owners face £2.7 billion bill each year for regulation

Britain's smaller hotels and restaurants are among businesses losing more than £2.7 billion every year due to government red tape, figures have shown.

Research carried out earlier this year by business lobby and support group the Forum of Private Business (FPB) found that small and medium-sized businesses in the hospitality trade contribute substantially towards £2,764 million spent each year complying with legislation.

The figure, drawn up using feedback from members of the not-for-profit FPB, is based on the amount of company time, and therefore money, spent on government-imposed bureaucracy. The survey found that recession-hit restaurateurs and hoteliers are forced to spend an average of 33 hours of company time each month on form-filling and paperwork. Those with nine or fewer employees spend an average of 29 hours, those with between 10 and 50 employees spend around 41 hours and firms with up to 249 workers devote approximately 131 hours.

The research concluded that, with external costs taken into account, regulation costs the UK's smaller business employers almost £12 billion per year (£11,920 million). The FPB is now urging the Government to cut down on red tape for small businesses and believes that reducing the time and cost of complying with legislation must not be sidelined, particularly as many firms are struggling to survive because of the recession.

"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," said FPB policy representative, Matt Goodman. "In addition, at a time when protecting both workers and businesses should be a priority, regulations are increasingly burdensome as businesses take on more staff."

The FPB provides a member helpline, a 24-hour legal advice service and Health & Safety and Employment Guides in order to help small businesses to comply with legislation. In addition, the organisation has recently launched an online video advice portal, www.smallbusinesschannel.co.uk, and has joined forces with Cardinus, a subsidiary of THB Group, to provide online health and safety training.

The FPB was founded in 1977 to campaign for fair treatment of private businesses by decision-makers. It continues to lobby today, on issues including late payment, overregulation and unfair competition.