Laws and regulations are necessary, but regulating a society and an economy imposes costs on businesses and citizens. It is understandable that businesses and citizens complain about red tape and the various obligations they have to comply with. An administrative burden (AB) baseline measurement clearly provides policy-makers what these complaints are about, by quantifying total costs imposed and identifying reduction measures.
Administrative burden (AB)
AB are the costs for businesses and citizens which result from complying with Information Obligations (IO) laid down in government regulations. IO´s are the various obligations to provide information and data to the public sector or to third parties. Examples of IO’s are obtaining licences, filling out tax declarations forms, reporting about environmental parameters, providing statistical data, etc.
Complying with these obligations means that administrative activities have to be carried out, such as collecting, processing, registering, archiving and delivering information. These administrative activities have to be carried out and cost time and money. The sum of these costs is the AB and measured in cost per year.
Measuring for further improvement
In a baseline measurement the AB are quantified with the Standard Cost Model (SCM). The SCM is a systematic approach to identify information obligations, quantify all necessary administrative activities and identify reduction measures. The basic principles of the SCM are shown in the picture below:
We developed the SCM originally for the Dutch government so that they could carry out a baseline measurement of the total AB in the Netherlands. Nowadays the SCM is used broadly as a systematic approach to quantify and reduce regulatory burden (see also Reducing burden from regulations with the SCM and Reducing burden for business sectors with the CAR Methodology).
Working together in one team
Our consultants have assisted a variety of governments in conducting AB baseline measurements. Our approach is to work closely with your team. Together we conduct the baseline measurement and initiate an AB reduction program. In this collaboration we provide the tools, methodologies, knowledge and experience; you provide the resources and local legal knowledge. This ensures knowledge transfer and guarantees that tangible burden reductions are achieved.