Tangled up in red tape

30 June 2005
Tangled up in red tape

Government red tape is eating up a third of some hospitality businesses' profits, according to caterer Charlton House.

The independent food service provider said it spent almost 200,000 last year on implementing legislation, form-filling, training, and purchasing documentation and subscriptions.

The bill represented 35% of the company's 557,000 net profit for 2004. Waste packaging legislation set the company back 17,000, while health and safety cost 90,000, including training, auditing and monitoring. Last year's increase in the hourly minimum wage to 4.85 cost 12,500.

Tim Jones, co-founder and chairman of Charlton House, said simplification of employment legislation, corporate law and health and safety legislation were desperately needed. "It's getting to the point where it's too much," he said. "It's very complex, and we had to hire consultants to advise us on it all. The cost of complying with the legislation doesn't bear relation to net profits, so our margins are being pushed."

Chris Brown, director of food service consultancy Turpin Smale, agreed, saying many of his clients were "frazzled and bombarded" by the amount of red tape. "We don't disagree with the legislation. Some is very laudable, but it's the sheer amount that's the issue," he said.

The British Hospitality Association also slammed the amount of legislation being heaped on the industry. Deputy chief executive Martin Couchman said: "We put our efforts into trying to reduce the amount of new nonsense, but legislation comes in all the time. Quite a high proportion of the 45 pieces of new legislation in the Queen's Speech will affect the industry."

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