By Emma Wilson, Partner
With the Autumn Budget approaching, the Chancellor has signalled a drive to cut bureaucracy as part of a package of measures aimed at supporting business.
Her focus is on getting SMEs operating more effectively and efficiently by removing the red tape that prevents them from investing in growth.
However, similar cuts have seen less than favourable results, so we are going to examine the potential risks and rewards of the business blitz.
What exactly is being targeted?
The Chancellor’s focus is squarely on helping SMEs become more agile in their operations, so larger businesses are unlikely to be impacted by the regulatory changes.
The proposed measures are wide-ranging and include:
- Raising thresholds for corporate reporting and removing duplicated requirements — a move that would mean up to 44,000 medium-sized private companies and roughly 7,000 subsidiaries would no longer need to publish Strategic Reports.
- Ending the requirement for companies to file a Directors’ Report at Companies House.
- Introducing digital verification for planning documentation to speed up local projects.
- Creating an online register of underground pipes and cables to reduce delays and avoid accidental strikes.
- Cutting lower-value regulatory returns and reducing the frequency of reporting for many banks, insurers and asset managers through action by the FCA and the PRA.
Alongside these cuts, there is also a clear focus on revolutionising Mergers and Acquisitions (M&A).
The proposals would streamline reviews of remedial measures and move some decision-making in-house at the Competition and Markets Authority (CMA), replacing the current independent-panel model with a CMA board committee.
These are significant institutional shifts that will require consultation and primary legislation before they can be implemented.
If a formal consultation is launched, we will monitor the situation and let you know the important aspects as they become apparent.
Will businesses actually benefit from these cuts?
In principle, removing unnecessary paperwork can lower costs, speed transactions and let managers focus on running their businesses.
A simpler, faster process for M&A, for example, could make consolidation or growth by acquisition more attractive.
However, the benefits depend on execution.
Poorly targeted cuts risk removing useful safeguards and creating fresh problems.
We have seen how well-intentioned reform can go wrong, as the disruption experienced by some local authorities after earlier audit-regulation changes is a reminder that removing oversight can have damaging consequences.
Efficiency that comes at the expense of control is not the way to bolster growth, as it instead damages long-term prospects.
How should businesses react to the changes?
Not all of the changes are going to happen and the ones that will may not happen immediately.
As such, it is important to keep track of your rights and responsibilities even as guidelines shift.
Seeking professional advice and support is the best way to ensure that any changes in bureaucracy do not negatively impact your business.
We can advise you on which practices should be preserved even if they do not remain a legal requirement, while also offering support to make the most of the reduced administrative oversight.
To make sure your business benefits from the business blitz, speak to our team today.