New Research: Radical reform of BERR required to save taxpayers £1 billion a year

February 02, 2009 9:10 AM


  • New TPA report shows how BERR is now little more than a £1 billion a year political platform

  • The UK is now less business-friendly it was a year ago 

  • Only 4% of small businesses used one of BERR's 3,000 business support programmes in 2006

  • If RDAs were scrapped too, taxpayers could save £3 billion next year in total 



A timely report from the non-partisan TaxPayers' Alliance calls for radical reform of the Department for Business, Enterprise and Regulatory Reform (BERR), reducing it in size by two thirds, and replacing this bloated bureaucracy with a streamlined Office for Business within the Treasury.  
 
With both Gordon Brown and David Cameron having brought back 'big beasts' to the BERR brief to balance perceived weaknesses in their Treasury teams, BERR is now back at the centre stage of politics. But is the department still relevant, or is it now simply an expensive platform for Peter Mandelson and Ken Clarke to reinvigorate the economic policies of the Labour and Conservative parties respectively?
 
The new report from the TPA, part of its Structure of Government series, suggests that much of BERR is unnecessary, administering unused business support programmes, failing regional development agencies and hopeless regulatory reduction schemes. The Liberal Democrats have advocated the abolition of the DTI/BERR for some time, and this report sets out a detailed plan about how this could be achieved. 
 
As we move into recession, British business needs an effective voice in Government, and with public sector debt ballooning, everything must be done to limit public expenditure. Scaling back the work of BERR and refocusing the department on those jobs it does well would be a step towards both these aims.

To read the full report, click here (PDF).
 
Key Findings 
 
- With public sector debt set to be over £70 billion in 2009-10, everything must now be done to limit unnecessary expenditure. Reform of BERR could save the taxpayer almost £1 billion a year. 

- Despite £13 billion spent on 'business' objectives since 2000, the UK is now a worse place to do business than it was a year ago. 

- Regulations passed since 1998 cost UK businesses more than £65 billion a year; the average corporate tax rate is 1.2 points higher than the OECD average. 
 
- In competitiveness, the UK has slipped down the international rankings in all but one of the World Bank's 'Doing Business' indicators. Britain at the beginning of 2008 – before recession – was already less competitive than it once was. 

- Only 4 per cent of small businesses used one of BERR's 3,000 business support programmes in 2006. 

- The number of business registering to pay VAT – a standard measure of business start-ups – only rose by 0.3 per cent between 1997 and 2006. 

-  It took the average UK entrepreneur 13 days to start a business in 2008. It took his French counterpart only 7. 

-  If Regional Development Agencies were scrapped too, we could stop almost £3 billion next year being wasted on unused business support programmes, unnecessary bureaucracies and misguided policy. 
 
Ben Farrugia, Public Policy Analyst at the TaxPayers' Alliance, said:
 

"It's time BERR changed its focus. Instead of a being a cabaret show for the darlings of the political past, it needs to deliver real help for business and go from showbusiness to showing results. BERR is failing in its mission of helping business. Most of the department is unnecessary, administering programmes that are either underused or failing. Cutting out pointless and ineffective projects could save a huge amount of money, whilst maintaining a strong voice in government for business. With the public finances in such a shocking state, everything must be done to limit unnecessary expenditure and BERR is good place to start."


  • New TPA report shows how BERR is now little more than a £1 billion a year political platform

  • The UK is now less business-friendly it was a year ago 

  • Only 4% of small businesses used one of BERR's 3,000 business support programmes in 2006

  • If RDAs were scrapped too, taxpayers could save £3 billion next year in total 



A timely report from the non-partisan TaxPayers' Alliance calls for radical reform of the Department for Business, Enterprise and Regulatory Reform (BERR), reducing it in size by two thirds, and replacing this bloated bureaucracy with a streamlined Office for Business within the Treasury.  
 
With both Gordon Brown and David Cameron having brought back 'big beasts' to the BERR brief to balance perceived weaknesses in their Treasury teams, BERR is now back at the centre stage of politics. But is the department still relevant, or is it now simply an expensive platform for Peter Mandelson and Ken Clarke to reinvigorate the economic policies of the Labour and Conservative parties respectively?
 
The new report from the TPA, part of its Structure of Government series, suggests that much of BERR is unnecessary, administering unused business support programmes, failing regional development agencies and hopeless regulatory reduction schemes. The Liberal Democrats have advocated the abolition of the DTI/BERR for some time, and this report sets out a detailed plan about how this could be achieved. 
 
As we move into recession, British business needs an effective voice in Government, and with public sector debt ballooning, everything must be done to limit public expenditure. Scaling back the work of BERR and refocusing the department on those jobs it does well would be a step towards both these aims.

To read the full report, click here (PDF).
 
Key Findings 
 
- With public sector debt set to be over £70 billion in 2009-10, everything must now be done to limit unnecessary expenditure. Reform of BERR could save the taxpayer almost £1 billion a year. 

- Despite £13 billion spent on 'business' objectives since 2000, the UK is now a worse place to do business than it was a year ago. 

- Regulations passed since 1998 cost UK businesses more than £65 billion a year; the average corporate tax rate is 1.2 points higher than the OECD average. 
 
- In competitiveness, the UK has slipped down the international rankings in all but one of the World Bank's 'Doing Business' indicators. Britain at the beginning of 2008 – before recession – was already less competitive than it once was. 

- Only 4 per cent of small businesses used one of BERR's 3,000 business support programmes in 2006. 

- The number of business registering to pay VAT – a standard measure of business start-ups – only rose by 0.3 per cent between 1997 and 2006. 

-  It took the average UK entrepreneur 13 days to start a business in 2008. It took his French counterpart only 7. 

-  If Regional Development Agencies were scrapped too, we could stop almost £3 billion next year being wasted on unused business support programmes, unnecessary bureaucracies and misguided policy. 
 
Ben Farrugia, Public Policy Analyst at the TaxPayers' Alliance, said:
 

"It's time BERR changed its focus. Instead of a being a cabaret show for the darlings of the political past, it needs to deliver real help for business and go from showbusiness to showing results. BERR is failing in its mission of helping business. Most of the department is unnecessary, administering programmes that are either underused or failing. Cutting out pointless and ineffective projects could save a huge amount of money, whilst maintaining a strong voice in government for business. With the public finances in such a shocking state, everything must be done to limit unnecessary expenditure and BERR is good place to start."

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