Andrew Harding, FCMA, CGMA, Chief Executive — Management Accounting at The Association of International Certified Professional Accountants, representing AICPA & CIMA, said:
“The UK rate of inflation is still much higher than our international competitors. Until the problem is dealt with, finance teams are having to prioritise cash management practices over freeing up resources for the investment that will drive innovation and productivity. This will inevitably mean longer term growth prospects are stymied.
“Research among AICPA & CIMA members found that there are policy areas where the government needs to focus to bring the rate down to a more manageable level. We need a push for higher productivity and to address the underlying causes of inflation. This means finally tackling skills shortages and weak investment, which plague the UK economy. Reforming the Apprenticeship Levy would be an excellent place to start on this front. Policies which address supply-side issues are urgently required. The changes to pension allowances and the reduction in the cost of childcare announced in the Spring Statement are welcome moves which could make a difference in the long term. Government could provide more certainty by outlining their business taxation plans for the next two years. This would give businesses knowledge of the tax framework they will be operating in for the medium-term and mean they can make better investment decisions.
“While organisations including AICPA & CIMA provide resources for finance professionals to help them navigate this difficult economic period, eventually the inflation problem will need to be tackled at source. We need a clear strategy which provides a stable environment for business planning and investment.”