The pre-conditioned adolescent brain is programmed to see a can and wants to kick it. Whilst society begins to dictate you should pick it up and bin it, the brain still wants what it wants and the urge does not disappear. There are many Peter Pan’s out there who still listen to that urge and are kicking that can well into later life.
However, as Chancellor of the Exchequer, you have to check your pointy hat and tights at the door and consider the implications of that can you plan to kick. When the Chancellor announced in his Autumn Statement that he was deferring the increase in auto-enrolment contributions we presume that the Chancellor didn’t just look at the saving to the Treasury in tax relief and looked a bit further to where the can landed.
In the midst of concern, outrage and mild panic the only constant on auto-enrolment was the strength of conviction that this would proceed firmly. It had to happen, was going to happen and non compliance would be punished. The failure of employers to take serious heed of stakeholder warnings meant a strong message was crucial. Employers may feel like they have heard it all before.
This is why I believe this is one can that should be picked up, and not kicked down the road. Whilst delaying the contribution increments by 6 months doesn’t sound a lot, it is the first chink in the armour. The press this week mentioned the potential “Panic Button” baked into the regulations if the industry could not cope with demand. This does not bode well for continuing the strength of the message.
The majestic Workie, who was once a pillar of strength and compliance has been thrown a curve ball in his attempts to publicise the merits of auto-enrolment. £8 million pounds of purple monster rendered toothless. I did wonder if they applied the Pokemon Paradox to this campaign. The more useless looking the Pokemon, the tougher it is. Trust me you would not wander up to a level 5 Jigglypuff and scratch its belly, perhaps this is the thought process behind him…assuming there was one.
What about the poor companies who have paid for advice, and made decisions based on the existing tables? Many employers would have sought a cost benefit analysis on phasing the contributions in. The increased management and communication requirements can often outweigh the overall saving of deferring these increments. Small businesses need their management working, as they generate the revenue in many cases. Therefore decisions have been made based on pragmatism and reduction of management time. However, moving the goal posts is not really fair on those who have spent time and effort looking at this and rewards the lethargic.
This is a problem blighting our industry. In September I was asked when a trustee board should look at the problem of VAT reclaim. I suggested waiting until it is almost too late and then acting. The general level of confusion made it clear, nobody was going to agree and a delay would come. Is that the right attitude? No, of course it is not, however, it is borne out of significant and repetitive experience. Then come late October, we have a year extension. What happens to the poor companies who have invested time and money in a solution that a year down the line may be challenged and replaced by something else?
Those who act early, take advice, plan and implement are continually disadvantaged when last minute changes like this are made. The best project managers do not get things done the quickest, they get them done on time, on budget and on specification. When setting timescales, we need to stop breaking our necks and work on what can be delivered. Does it make sense to increase contributions on complete tax years? Of course it does. However, it also made sense 3 years ago when they first set them.
Having spent a lot of time in November visiting small employers, all they want is fairness, systems that work and some certainty. We need to start striving towards this. Is this the biggest risk to auto-enrolment? No, it probably is not. This will clearly be when Disney’s lawyers put a picture of Workie next to a Monsters Inc DVD and Mickey Mouse starts sending notices to the Treasury. I bet he won’t defer the writ at short notice!
Rant over….and breathe.