The public spending watchdog is investigating the effectiveness of government efforts to reduce regulatory burdens imposed on businesses.

Business secretary Sajid Javid (pictured) told the British Chambers of Commerce’s annual conference in London yesterday that the government would cut the cost of regulation by a further £10bn by 2020, following a £10bn cut between 2010 and 2015.

Under the Small Business, Enterprise and Employment Act 2015, governments are required to publish and report on their performance against a business impact target.

Javid told the conference the government was publishing a target of £10bn.

The target will cover the impact of legislation and the way statutory regulators enforce existing rules.

Javid said: ‘Rather than being allowed to hide behind red tape, they’re going to have to look at the cost to business of the way they work.’

The Department for Business, Innovation and Skills’ approach to reducing regulation is currently the focus of a National Audit Office consultation.

The NAO is asking for evidence on the costs and benefits deregulation target and the ‘likely effectiveness’ of the approach taken to achieve it.

Javid announced yesterday that he was upgrading the ‘one in, two out’ policy, which required government departments to remove or modify existing rules with double the cost to business for every new regulation introduced that cost money to comply with.

Departments wanting to introduce regulatory costs ‘for things that weren’t in our manifesto’ will be expected to find savings worth three times as much as part of a ‘one in, three out’ policy, Javid said.

‘It’s very easy for a Whitehall bureaucrat to come up with an idea that looks great on paper and, with the stroke of a pen, place a huge extra burden on businesses.

‘But if that same civil servant has to also find ways to remove three times as much red tape, they’ll think twice before putting new regulations in place.’

Javid also announced a ‘root and branch’ review of the way in which local authorities regulate businesses.

The review will lead to an ‘agreed’ set of reforms, covering legislation and enforcement.

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