Administration: the burden of bureaucracy

Companies have to invest a lot of time and money in dealing with bureaucratic work. But the coronavirus pandemic has demonstrated the importance of efficient bureaucracy. Let's take stock.

This article is part of the special feature on bureaucratic madness in the skilled trades.

The announcement came early , but the payments didn't . As the second lockdown loomed, politicians announced initial aid for businesses affected by the pandemic back in October . But instead of the promised November aid, bureaucracy took over, including the involvement of a tax advisor who was authorized to submit the application. There were verbal promises of aid in December, then January, but nothing more than advance payments materialized. Disbursements have only been underway since January 11, 2021.

Paralyzing bureaucracy as a permanent construction site

The November aid measures are just one example of how paralyzing bureaucracy can be. Because order is supposed to exist, bureaucracy is necessary. But the crucial factor is how it's implemented – and bureaucracy quickly proves to be a never-ending construction site. Even ancient Rome is said to have contributed to its downfall through rampant bureaucracy . It doesn't have to come to that drastic, but every single livelihood threatened by bureaucratic burdens during the coronavirus pandemic is one too many.

And indeed, attempts to combat bureaucracy are a recurring theme. The first Bureaucracy Reduction Act was passed in 2007 , followed later that same year by Bureaucracy Reduction Act II – and Federal Minister of Economic Affairs Peter Altmaier announced the end of paperwork with Bureaucracy Reduction Act III. The lockdown impressively demonstrated just how far public administration has gone in eliminating paperwork and transitioning to digital processes.

The smaller the company, the higher the bureaucratic effort

The burden of dealing with government agencies falls particularly on small businesses. The smaller a company is, the greater the time commitment required to fulfill bureaucratic tasks, as the Institute for SME Research determined years ago. Andreas Halle from Dortmund, for example, regularly experiences just how time-consuming this can be .

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His misfortune: As a master optician and owner of a business with four employees, he not only has to overcome the bureaucratic hurdles prescribed by companies: "As a healthcare professional , I also have to deal with the Medical Devices Regulation and struggle through the General Data Protection Regulation ." Background: He handles patient data for the production of eyeglasses, which is particularly sensitive according to the GDPR, resulting in stricter requirements.

Long waiting times for a piece of paper

He also mentions the need to fill out and upload data to the State Statistical Office on time . Halle doesn't deny that surveys are useful. "But sometimes I really wonder if we don't have more important things to do." The administrative work can take up to two hours a day . What particularly annoys him is that "when colleagues or I need a necessary certificate from the authorities, we can sometimes wait eight weeks for the piece of paper."

This was simply an extract from the central business register . Healthcare professionals need this to obtain the mandatory prequalification if they want to enter into a contract with a health insurance company. It is essential if they want to, or have to, bill the insurance company directly for their services.

ZDH: Bureaucracy relief laws too timid

The bureaucratic tasks, both large and small, faced by businesses in Germany amount to almost €45 billion . This figure was determined in 2012 on behalf of the federal government to create a bureaucracy cost index . This index has been updated since then to track progress in reducing red tape. However, the index, set at exactly 100 in 2012, most recently stood at 98,56, according to the Federal Statistical Office , representing a reduction of €943 million.

But that doesn't sound like real progress. Politicians had championed the "one in, one out" principle in their legislation: if a new bureaucratic burden is introduced, another must be eliminated. The catch: This only acts as a brake , preventing bureaucracy from spiraling out of control , but it doesn't actually reduce it. "The last three laws aimed at reducing bureaucracy were far too timid in their content," concludes Holger Schwannecke , Secretary General of the German Confederation of Skilled Crafts (ZDH) . "In practice, they haven't brought about any noticeable changes."

Simplify application and payment

The key factor here is time : Gaps emerge as the process winds its way through bureaucracy, as was the case with the emergency aid during the second lockdown. There were the terms and conditions , then the changes to the terms and conditions , then the changes to the changes.

"The application process needs to be simpler and the disbursement of funds needs to be significantly faster," criticizes Hans Peter Wollseifer , President of the German Confederation of Skilled Crafts, regarding the bureaucratic burden of the emergency aid . "But what we're seeing is that with each revision, the conditions for receiving aid are becoming less and less understandable." His conclusion: "This is far removed from the reality in businesses; it's much too bureaucratic."