Deloitte firms team up on EU
regulation

Deloitte member firms have joined a consortium to assist the
European Union and member states to reduce the business costs of
complying with European legislation. Deloitte engagement partner
Richard Doherty speaks to IAB about the
project.

The European Commission plans to slash one-quarter of the
business compliance costs of existing EU regulation by 2012. This
ambitious strategy is a key pillar of the EU’s Better Regulation
programme, which aims to eliminate unnecessary barriers and burdens
on European business.

A consortium, comprised of experts from Deloitte member firms
across Europe and consultancies Capgemini and Ramboll Management,
has been tasked by the EC to identify opportunities to cut costs in
three key aspects of the project. These include measuring the
business costs that arise from EU legislation, identifying
opportunities to reduce the administrative burden and helping
regulators communicate activities about the project.

The global network’s lead client partner for EU institutions,
Richard Doherty, is the engagement partner on the project. The
Deloitte Belgium partner tells IAB the programme will be
run by a core team drawn from the three organisations. The core
will consist of between 40 and 50 people of whom 15 to 20 will come
from Deloitte. There will be an additional circle of part-time
support and other expert roles. In each of the 27 EU member states,
there will also be teams drawn from the three consortium
members.

“The workload at national level will depend in the end on the
number of items of legislation that are covered by the programme,”
Doherty explains. “Given the tight time frame, if we’ve got a large
number of pieces of legislation we’re going to have to put a large
number of people on in each country.”

Deloitte staff for the project will be drawn from audit, risk
services, tax, legal and consulting. “The scope of the work to be
done and the subject matter of the work we’re doing requires skills
from all of those different areas. The lead is in consulting but we
need very much the input from the other colleagues,” Doherty
says.

Discussions about forming the consortium began well before the EU
issued a public tender for the 18-month programme. Doherty says the
consortium members had all previously worked with government and
business in individual EU member states to develop ideas for
reducing the burden of regulation legislation. “We were, as it
were, watching the European programme,” he explains. “We had
started discussions with the other companies in advance of [the EU
announcement] in order to ensure that we could create the
consortium effectively, because we knew that it would be a highly
competitive process.”

The EU-wide project has been inspired by several individual member
states already involved in initiatives to reduce the administrative
burden of regulation. The EU hopes to identify and align best
practices across the region. The incentive behind the project is to
make the EU more globally competitive by reducing the cost of
business. In addition to appointing the consortium, the EC also
plans to launch a website where companies and individuals can post
their ideas for reducing the administrative burden.

The consortium will be active in all 27 European member states and
will develop solutions to specific issues identified at member
state level and on a European scale.

Doherty says the task for the consortium in the year ahead “will be
measuring in each country the current cost and burden that these
laws represent for businesses”. He continues: “Once we have that
burden estimated, we can be much clearer about which areas are more
burdensome than others. What we’re looking at is both generic laws
affecting all businesses in the areas of say company law, of
employment conditions, VAT, statistics, and what is called cohesion
or regional policy and public procurement; and then in terms of
laws affecting particular sectors, we’re looking at financial
services, fisheries, transport, the food industry, agriculture and
pharmaceuticals.”

Doherty explains there are potentially hundreds of rules and
procedures at national level that may have to be changed in order
to implement the recommendations the consortium will offer. “Before
that’s all discussed, agreed and implemented, it will inevitably
take some time,” he admits.

Despite Deloitte’s experience in assisting EU member states find
ways to reduce the administrative burden, Doherty is reluctant to
reveal any quick fixes. “Anything that we come up with has to be
discussed with the member states and the commission and even if we
propose something, they might not agree,” he explains. “We will not
wait until the very end of the project to make proposals, we will
be making proposals right throughout the process… it’s [then] up to
our clients to look at what we propose and if they agree with it,
obviously they will take it forward.”

The project will run for 18 months and is predicted to finish by
the end of 2008. This is in time for the European Council to launch
implementation of the proposals in early 2009.