☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily
July 2011 | Adam Leach
businesses in the UK have to spend a collective £5.8 billion on external
services to deal with red tape and bureaucracy.
to a study conducted by the Forum ofPrivate Business (FPB), this
is in part due to buyers placing greater pressure on their suppliers to achieve
specific accreditation to win work and to boost the overall image of their
of the bureaucratic increase is due to large private sector organisations
demanding increased accreditation from their suppliers as a way of improving
the perceived quality of their own services,” the report said.
study, which surveyed more than 1,000 businesses, also suggested more
accreditation is now required because a greater proportion of the work won by
small firms is in the public sector or as part of public/private contracts.
respondent to the survey explained that the time and level of resources required
to comply with demands means that he has to hand the work over to external
contractors. “[It's] costly and time consuming, harder to keep up with
ever-changing regulations. We are forced to use outside consultants otherwise
there would be no time to run the business,” he said.
£5.8 billion was just a chunk of the £16.8 billion the small business group
claims SMEs have to spend complying with rules and regulations. The total
figure is up one per cent compared to two years ago, although the FPB says the
impact of the rise is worse due to the poor economic climate.
Bennett, head of campaigns at the FPB, said in statement: "While this is a
rise of just 1 per cent compared to two years ago, the increase is greater in
real terms because economic activity, which drives the need for compliance, has
shrunk significantly since the 2009 survey was carried out.”