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23 November 2012

New Dutch methodology to reduce regulatory costs

Delegates to the twice yearly meeting of (European) Directors and Experts of Better Regulation (DEBR) in Dublin (22-23 November) were informed about recent research and testing of a new methodology to remove or lower obstacles to business innovation and growth by way of further reductions in the regulatory burdens. A Cost-driven Approach to Regulatory Burdens (CAR) offers a change of perspective by taking as a starting point the actual costs incurred in companies to comply with regulation, irrespective of which legislation is at the origin of the cost. The new methodology, developed by SIRA Consulting in the Netherlands, a company to which we already owe the widely applied SCM, is being tested on two pilot studies (chemical industries and European bakeries) and is expected to be finalised during 2013. It seeks to correct some of the limitations of the Standard Cost Model. Delegates were impressed by the conceptual shift underway, but expressed concern that the new method may be expensive and/or difficult to implement. This contribution enriches the discussion started earlier this year by a key paper from Germany: Guidelines on the Identification and Presentation of Compliance Costs in Legislative Proposals by the Federal Government, which also aims to address the full range of regulatory costs.

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