AUTUMN 2022 COVID RECOVERY A CLEAR ROUTE to success Regulatory changes must be communicated well if firms are to thrive, says post-pandemic study A new report by the Federation of Small Businesses (FSB) and the universities of Newcastle and Birmingham says a lack of regulatory clarity over COVID-19 lockdowns added to the strain on firms. More than a third (35%) of small businesses found it quite or very difficult to understand the regulations relating to COVID security, according to Navigating the COVID-19 regulatory landscape. One in five (22%) of the almost 1,000 small businesses surveyed for the study said the line between advisory guidance and regulatory requirements during the pandemic was totally unclear. This lack of clarity led to a tendency by some small firms to gold plate go beyond minimum requirements for fear of falling short which came at a cost in terms of worry, time and money. Furlough was ranked by 18% of small firms as one of the most useful but also one of the most difficult pieces of regulation The health and education sectors struggled most when it came to compliance with COVID measures, with four in 10 (39%) reporting difficulty in taking the appropriate action. Significant numbers of hospitality, sports, arts and entertainment firms (30%), as well as manufacturing (28%) and wholesale and retail businesses (27%), also struggled. Furlough was ranked by 18% of small firms as one of the most useful but also one of the most difficult pieces of regulation. The move to flexible furlough helped, as it removed unnecessary restrictions that prevented some businesses from taking advantage of this lifeline. One small firm expressed its frustration at the continued lack of certainty over negotiating working-from-home arrangements with employees. Having adapted to the initial shock of engaging with a raft of new regulations, however, some small businesses found opportunities to implement changes that they would maintain post-pandemic. The majority (82%) of businesses relied on more than one source of information to find out about regulatory changes during the pandemic. Nearly three-quarters turned to GOV.UK, while half relied on representative organisations, such as the FSB, that tailored their language and information to be more useful to businesses. In light of the reports findings, the FSB is urging governments and regulators across the UK to: n Clearly communicate the distinction between actions a business must take, and the steps it might choose to take, when changing or introducing regulatory requirements n Make effective use of intermediary bodies when communicating changes to regulation n Publish illustrative examples of compliance to help small firms understand what good practice looks like n Introduce grace periods after regulatory changes, to avoid penalising those doing their utmost to comply n Minimise restrictions or red tape on schemes designed to help businesses. While governments and regulators across the UK had to act at great speed as the pandemic evolved, the report claims some regulatory shortcomings including around clarity and communication were consistent with problems encountered in more normal times. Credit: Karen Woolley, development manager, Federation of Small Businesses Image: iStock / gremlin The reports authors believe that if their recommendations are implemented, the UKs compliance landscape can be reformed to help, rather than hinder, those who are looking to start up, invest or expand in business. For further information, please contact your local Trading Standards Service