Regulations linked to the Covid outbreak made it harder for small businesses to come through the pandemic, a study led in the North East claims.
The Federation of Small Businesses (FSB) has worked with Newcastle University and the University of Birmingham on the study which urges the Government to learn lessons from the implementation of Covid-19 health measures and create a regulatory environment that will steer the economy away from recession.
In the study, more than a third (35%) of small businesses surveyed said they found it difficult to understand regulations relating to Covid security, while one in five (22%) said the line between advisory guidance and regulatory requirements during the pandemic was “totally unclear”.
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The report’s authors have called on the Government and other regulators to clearly communicate the distinction between actions that a business must take, and the steps that a business might choose to take, when changing or introducing regulatory requirements.
They have also called for longer grace periods when changes are introduced and better use of intermediary bodies to help communicate changes to regulation.
FSB chair Martin McTague said: “With economies now thankfully unlocked, this is the moment to step back and assess what broad regulatory lessons can be learned from the pandemic.
“While it is understandable that governments and regulators had to act at great speed as the circumstances of the pandemic evolved, some of the regulatory shortcomings were consistent with problems encountered in more normal times, including around clarity and communication.
“The gold plating trend that we saw over the lockdowns is not confined to health measures, this is a wider issue that drains firms of the resources they need to innovate, upskill and recruit as we work to secure our economic recovery.”
Dr Paul Richter, from Newcastle University, was the project’s principal investigator.
He said: “The onset of the Covid pandemic presented the whole of society with a set of immense challenges. Governments were forced to act to protect public health while, simultaneously, minimising negative impacts on the UK economy.
“The regulatory response undoubtedly shook the UK’s small business community. Business leaders had to take decisions with far-reaching consequences for their employees’ livelihoods, public and employee health, and the viability and survival of their businesses.
“Many businesses found it difficult to understand how to comply with the raft of new and changed regulations. And many felt that more clarity was needed in terms of whether regulations were legally required or recommended. This acted as an additional draw on small businesses’ already stretched resources.”
