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The Administrative Burdens Measurement Exercise

The Admin Burdens Measurement Exercise (ABME) was carried out in 2005 by the Government in response to the Better Regulation Task Force’s report, ‘Regulation: Less is More,’ as part of the Chancellor of the Exchequer’s Better Regulation Action Plan. The aim of the Measurement Exercise was to measure the baseline administrative costs imposed on businesses, charities and the voluntary sector as a result of central government, European or other international regulation.

The focus of the work was on measuring the administrative costs of regulation rather than the compliance or policy costs. These are defined as:

“the costs of administrative activities that businesses are required to conduct in order to comply with the information obligations that are imposed through central government regulation.”

The exercise was carried out by PricewaterhouseCoopers (PwC) in collaboration with the Department using the Standard Cost Model (SCM) methodology, which provides a simplified framework for estimating the administrative costs. PwC produced a report for the Department on the exercise.

The results of this exercise were then examined by an independent panel of industry representatives to adjust the figures to take account of activities included in the measurement that business would carry out regardless of the regulation being in place (‘business as usual’ costs). Our baseline includes 117 regulations which have 2119 information obligations giving an indicative cost to industry of £487 million per year (after adjustment for "business as usual" costs). We will continue to measure the impact of new regulations and adjust our baseline accordingly.  Adjustments will be reported in the Annual Simplification Plan updates.

We are committed to delivering a net saving in administrative burdens of 25% or some £120 million overall by 2010. Our Annual Simplification Plan has measures that are estimated to deliver this target. Further measures are being investigated to offset any burdens deriving from new regulations.

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