We must break through the sludge to bring consumers relief from red tape
Professor Andre Spicer, Professor of Organisational Behaviour, discusses the need for reduced bureauocracy — at company and governmental level — or there may be a heavy cost to consumers and their emotional wellbeing
Barriers to opportunity and progress are commonplace in business and industry, but they do not have to be and, as a new report argues, must not be if Britain’s economy is to bite back.
Conservative MP John Penrose’s report makes clear that watchdogs have an unprecedented opportunity to act now, outside of EU restrictions, to promote competition and protect consumerism, in an overhaul of red tape like never before.
In order to clamp down on rip-offs and internet monopolies, the bureaucracy that so often frustrates and hinders can be removed to allow competition to thrive which benefits the consumer with regulation only introduced as a last resort.
Andre Spicer, Professor of Organisational Behaviour and Head of the Faculty of Management at the Business School (formerly Cass), believes the burdensome administrative procedures used by companies is also used by policy makers and it is having a significant impact on profits, time-management and is negatively impacting emotional energy.
Government tactics must aid not hinder
“One target of Penrose’s report on competition rules is ’sludge’ — the pointless and maddening administrative procedures which burden consumers. Some examples include ‘subscription traps’, the difficulty of opting out of unnecessary services, and costly defaults.
“One example: many consumers find it difficult to leave service providers once they are signed up. The result is that consumers of many services experience the ‘Hotel California effect’ where ‘you can check in any time you like, but you can never leave’.
"Sludge is not just used by companies — it is also increasingly used by governments as a way of rationing services. Often public agencies have increased the complexity of administrative processes so the public do not use them."
“For instance, accessing social services often requires filling in lengthy and complex forms. Often people who have the right to benefits are defeated by the paperwork. This decreases demand and saves money.
Consumers bogged down by paperwork and emotional hardship
"While sludge can save governments money and make companies more profitable, it imposes a heavy cost on consumers in terms of time, money and emotional energy."
“Often the cost of dealing with sludge falls onto the shoulders of women who do the majority of the household administration. One recent study in the US estimated that ‘sludge’ created by the federal government imposes about 9.78 billion hours of paperwork a year. Let us put that into perspective. That is equivalent of the entire population of Chicago working all year just on federal paperwork. The amount of sludge imposed by companies is likely to be just as high.
Auditing the sludge
“Getting rid of sludge is difficult. Often it is created by hidden procedures. However, some have called for sludge audits: the identification of the costs entailed with pointless administrative work. These could be done just for government services but also for regulated services provided companies like power, banking, housing and communications.”