Navigating the COVID-19 Regulatory Landscape: How small businesses experienced regulations in a crisis

As the COVID-19 pandemic took hold in early 2020, governments across the UK were forced to react. They were faced with the considerable challenge of striking a balance between protecting the health of the UK population while mitigating the negative impacts to the economy. One element of the response was a regulatory one and Government actions compelled business leaders to take decisions with far-reaching consequences for their employees’ livelihoods, public and employee health, and the viability and survival of their businesses. This report sets out the impact of the new and changed regulations arising from the pandemic on the UK small business community.
As is well understood, regulatory compliance presents small businesses in particular with a significant challenge given their relatively constrained resources. Hence, pandemic conditions presented those businesses with a stern test. This report provides an account of how small businesses from across
the UK responded to that test. In so doing, it demonstrates the severe difficulties that many business owners faced in adapting to how the rapidly changing regulatory landscape affected their business. At the same time, the report evidences the resilience and innovation exhibited by business owners
as they sought to adapt their businesses to survive pandemic conditions and thrive beyond them.
This report draws on the insights and experiences of nearly 1000 UK small businesses, the vast majority being members of FSB. The research comprised a large-scale online survey in addition
to follow up interviews with individual business leaders, which added depth and explanation to the patterns revealed by the survey.
The detailed findings of this research are set out in several sections. The initial sections report
on small businesses’ engagement with new and changed regulations arising from the pandemic, identifying those which businesses found most difficult to comply with and those they found most beneficial. The report then interrogates business leaders’ experience of complying specifically with COVID-security regulations, something that the overwhelming majority of businesses were affected by to some degree. Research findings identify differences in the impact of regulations depending on factors including: the number of employees, the sector, the business model, and the type of premises. The report also concludes that the impact of regulations varied over the course of the pandemic for individual businesses depending on the nature of the business and its regulatory experience. Some reported that the shock of having to engage with a raft of new regulatory information prompted them to implement innovative changes to their business operations which they intend to keep. Many of those changes have highlighted the importance of small businesses growing their digital capacity. Finally, the report identifies businesses’ views on the clarity, consistency, and timing of regulatory communications as well as the sources that they relied
on to take responsive actions.
This comprehensive picture of UK small businesses’ experience of navigating an unprecedented period of regulatory change informs a series of recommendations for those tasked with designing and implementing business regulations. The insights set out in this report should inform regulatory responses to future public health and, potentially, other widely felt crises, and to regulation more generally in a post-COVID landscape.