UK regulator plans to reduce compliance costs
administration costs faced bybusinesses in complying with safety
regulations, leaving operators with more money in their pockets.
A proposal published by the Food Standards Agency (FSA) sets a target of reducing administrativecosts for businesses by about £12m (€17.8m) over the next four years.
An FSA study estimates UK businesses collectively spend about £128m annually complying with foodregulations. Using a methodology adopted across government, the FSA estimated that £42m of these costs represented'business-as-usual', money spent related to activities that businesses would undertake regardless of regulation.
The net estimated additional administrative cost burdens of food regulation on business, was thereforecalculated to be £86 million. Businesses collectively spent about £38.6m of this complying withthe requirements of EU or international law over which national regulators have little control.
They spent another £45m complying with the requirements of EU or international law over which members states have somediscretion. Another £2.4m was spent on complying with domestic regulations.
The study came about as a result of a UK government proposal that the FSA set a target of reducing the net administrative burden of food regulation by 25 per cent by April 2010.
However the FSA's governing body noted that EU and international law requirements limit theregulator's ability to cut the burden on business. Instead the FSA executive has recommended that theregulator should have a target of £11.9m reduction in the areas of law over which it at least hassome control.
At a public board meeting held last week, the FSA stated that one of its studies has indicated that the"existing framework of food law did not place a particularly onerous burden" onbusinesses.
The measurement exercise found that of the 53 FSA regulations, seven regulations account forabout 91 per cent of the costs faced by businesses.
The food safety regulations include those dealing with dairy products, meat, feeds, and labelling.
The top three types of information obligation by cost are the keeping of records, statutory labelling for thirdparties and returns and reports, the FSA stated.
The top three types of administrative activity by cost are the gathering and assessing relevantinformation, familiarisation with regulatory requirements and required reporting to the regulator.
The FSA proposes to work on cutting down the amount and type of information it requires frombusinesses as much as possible.
"If we were able to reduce this burden - asking for this information only when necessary - we couldincrease the capacity of the businesses that provide this information, and the enforcement officers who check it, to focus on compliance and improvedconsumer protection," the FSA proposes.
The target proposal was considered at the FSA board meeting on 21 September.
