About half of businesses think local authorities do not understand them well enough to regulate them. A national survey carried out for the Local Better Regulation Office found that business growth was still threatened by the burden of regulation, though there were signs that measures to cut red tape were having a positive impact.

The Business Perceptions Survey 2010 of 2,000 companies found more than half of businesses felt the overall level of regulation was an obstacle to their success and one in six saw complying with regulation as the single greatest challenge they faced. The survey found, however, that business believed the purpose of locally enforced regulation was clear. Respondents also saw most regulation as fair and proportionate with evidence of a growing partnership approach between businesses and councils.

Clive Davenport, of the Federation of Small Businesses, said firms with few employees faced considerable pressure on time and resources and red tape was like an additional tax. Inconsistency in enforcement added to the cost of regulation for business. Thirty-one per cent of businesses thought that different local councils did not take a joined-up approach to regulation. Large businesses were less confident that councils were consistent.

LBRO Chairman Clive Grace said locally enforced regulation such as food safety, consumer protection, fire safety, health and safety rules were essential but could have a significant impact on business growth. “The way local regulation is enforced is just as important as the rules, and there are serious concerns about the cost to business of dealing with it. However, there are positive signs from this research and other studies,” he said.