What to expect at today’s Autumn Budget announcement?
Today, Chancellor of the Exchequer Rishi Sunak will present his Autumn Budget to the House of Commons, and speculation on what will be a part of the announcement is circulating.
The Autumn Budget will be the second financial statement made by Sunak this year, following the Spring Budget on March 3. He will present his budget this afternoon.
Ahead of the official statement, Business Leader has spoken to some industry experts to find out what they thnk will be a part of today’s historic announcement.
Can the Budget help accelerate economic recovery from the pandemic?
Jeremy Thomson-Cook, Chief Economist at Equals Money shares his thoughts on the potential impact the Autumn Budget could have on a potential economic recovery.
The Autumn statement will give us a taster of how the government plans to recover its pandemic spending, with the Spring 2022 budget will be much meatier. It’s unlikely that we will see any change to business rates, VAT or corporation tax in Wednesday’s address, but there are a couple of areas that small businesses should pay close attention to.
Firstly – the proposed changes to the National Living Wage. Mr. Sunak looks set to announce that workers on the minimum wage will see an almost 10 percent increase to £9.50 per hour for those aged over 23. This may be welcomed by workers as a step in the right direction, but it’s important business owners ensure proper planning to avoid potential job losses in 2022 – especially as the increase could make up an extra person’s wage in cases where several or many employees are affected.
Next – inflation is rising and there is a delicate trapeze to be crossed in deciding when and how to act. Is the treasury forecasting high inflation to such an extent that it may force the Bank of England’s hand? Or could they cut spending so much that we see concerns about growth moving forward? This will be important for businesses to pay attention to, since inflation rates are so closely tied to performance of Sterling and the UK’s ability to attract international business.
Finally, small and early-stage businesses should listen out for an update to the government’s Help to Grow scheme – which pledged management courses and a grant of up to £5,000 to help small businesses invest in digitalization.
Our economy here in the UK is service based, meaning that any recovery from the pandemic must be closely tied to encouraging consumer spending. With concerns about rising fuel prices and inflation, this is no mean feat. What would be interesting to hear later this week is how the government plans to encourage spending into 2022, to give businesses the best chances of bouncing back sustainably.
Mariano Dima, President & Board Director at Soldo, spoke to BL about the importance to recognise the importance of entrepreneurs in any announcement later today.
In his Autumn Budget, the Chancellor is faced with the unenviable task of fixing public debt after a year of record spending. While everyone appreciates the importance of balancing the books, we hope this does not come at the cost of critical support for business and entrepreneurship in this challenging environment.
Many of the six million SMEs in the UK remain exposed post-pandemic. Intelligent investment is needed to stimulate economic growth, which should in turn should support a reduction in the UK’s public debt.
The Government should be looking to direct money towards technology and digital tools. Such resources and education in them hold the key to helping SMEs boost efficiency, maximise productivity and uncover commercial opportunities. We welcomed the Spring Budget’s Help to Grow scheme, offering free tech advice and software discounts, and look forward to details of its second stage. Similarly, we hope that the recently announced funding for 2,000 AI scholarships is an example of further packages to be announced in the Budget to support the shift to a fully digitalised economy.
Impact on UK SMEs
In anticipation of the Autumn Budget Statement on Wednesday, please find below a statement from Michelle Ovens CBE, Founder of Small Business Britain, the UK’s leading champion of small businesses in the UK. Her comment highlights what she would like to see announced with regard to support for small businesses across all sectors.
We still need to see strong support for the nation’s 6 million small businesses coming through in the Chancellor’s Autumn Statement.
There has been unprecedented support for these businesses from the Government throughout the pandemic, but withdrawing this now, all at once, would be a potentially damaging mistake – leaving firms to face a really tough combination of higher supply chain costs, higher energy costs, shortages in staff, stock and fuel, and rising finance costs too.
Although recent data shows that small businesses are more optimistic than mid pandemic, real concerns are setting in during the run up to Christmas. We all need to pull together to support this core of the economy through the winter. The public is doing so – data from Small Business Saturday and American Express shows over half of people are supporting small independents more, out of recognition for their vital role in lockdowns – but this effort needs to be matched by government too.
Of course, we recognise the tough position the Chancellor is in with public spending, but there are lots of levers still left to pull, to help small businesses out.
For example, I’d encourage a delay in the VAT rise for hospitality firms, a delay in the rates return for high streets, and allowing longer periods to pay key bills, such as HMRC helping to ease cashflow going into the winter. Making recovery loans far more accessible to small businesses than they currently are, would be a massive boost.
Any tax rises also really do need to be equitable with bigger businesses shouldering their share of the burden too.
Impact on the tech sector
Chancellor Rishi Sunak is expected to announce $3 billion worth of investment into skills and education in his Autumn Budget, to help give people ‘the skills they need to earn more and get on in life.’
In what the government is calling a “skills revolution”, Sunak will announce the number of skills boot camps in areas such as artificial intelligence, cybersecurity, and nuclear will be quadrupled.
This initiative has already been supported as a ‘step in the right direction’ by a number of industry experts in the tech and training sector, but have also referenced the need for better diversity in STEM, more opportunity in hybrid working.
Rod Flavell, CEO of FTSE 250 technology training company FDM Group said: “The Covid pandemic has devastated businesses as well as disrupting the education and careers of millions of people from across the country. The Chancellor’s proposals for skills bootcamps, extra funding for digital training and other lifelong learning initiatives is a positive step in the right direction, but so much more needs to be done. Far too many young people are still avoiding a career in critical subjects like computer science and coding, at a time when businesses are crying out for candidates with proficient technical expertise.
Flavell continued: “Likewise, the tech sector is still lacking in diversity, something which has to change is we are rebuild the economy so it is fit for the challenges ahead. We need to see a concerted effort from government, businesses and organisations in the education sector to encourage more young people into the technology industry. This means investing heavily in training, support and guidance to ensure we can quickly close the skills gap and reboot the UK economy for the long-term.”
Meanwhile technology expert Sridhar Iyengar, Managing Director, Zoho Europe, said: “The Chancellor’s proposals to boost digital skills training through bootcamps, extra funding and other initiatives is a welcome move, particularly with workforces shaken by the Coronavirus crisis and successive lockdowns. As part of the recovery, companies should also take the necessary steps to re-engage their people, particularly with the widespread adoption of hybrid and remote working, which can leave staff feeling isolated and out of the loop in terms of decision-making.
“This means modernising digital capabilities and implementing the necessary collaboration technologies, to bring people together in terms of managing workloads, interacting via video and team updates, ensuring everyone feels included and engaged. Ultimately, workforce unification when so many people are operating away from the office can only happen when the right unification technology is place and appropriate training is provided to ensure no-one is left behind in using the new tools. Forward-thinking businesses will bear this in mind when rebooting for the challenges ahead,” concluded Iyengar.
Impact on the education sector
With the Autumn Budget 2021 set to take place amid the country’s worst economic recession in 300 years, Jackie Denyer, MD and Founder of Professional Training Solutions, spoke to BL about why the Government must show long-term commitment to the education sector and build an apprenticeship and skills led nation.
We welcome the Chancellor’s commitment to the ‘Skills Revolution’, with investment into the skills of our current and future workforce.
However, having been involved in the further education sector for nearly 30 years, and also mother of a child who achieved her first-class degree through the BTEC route, I urge the government to reconsider the reduction in investment for these qualifications, which continue to be such an important vocational route for many young people.
BTEC qualifications have been the making of so many people, and offered them routes into both work and Higher Education. I continue to have reservations about the continued investment of T-levels. Is the government really prepared to continue investment into this when only 2,000 young people have taken up the opportunity? Is this the right investment, when there are already alternative routes for young people such as BTECs, A Levels and apprenticeships?
With greater backing behind traineeships, apprenticeships and adult skills, we will see the workforce upskill, as more qualifications and opportunities will allow people of all ages to progress within the workplace. This is a key factor in supporting employers too, helping them to recruit and retain their current and future workforce. This funding will also enable us to train and support those seeking work, by upskilling them to meet the needs of employers too. As a provider of Skills Education, we urge the government to continue to invest in the Private Independent Training Provider sector, which provides niche training and c75% of apprenticeships.
When it comes to the proposed £5.4bn investment into adult health and social care, including £500m for staff training, we urge the government to roll this out as quickly as possible. We need a sector that is better funded, and appreciated. Our health and social care sector is struggling to recruit – historically the sector has suffered from being poorly funded, and is only able to offer carers minimum wage for what is a physically and mentally demanding role. It’s time to leverage the right tools and training and for the government to show long term commitment to help the sector get back on its feet.
Ian Rawlings, RVP EMEA for SumTotal expanded on this.
As life starts to follow a less tumultuous path than we’ve seen in the past 18 months and we become accustomed to ‘the new normal’, the Chancellor’s autumn budget has been widely anticipated in all circles. In his address to the Conservative Party earlier this month, Prime Minister Boris Johnson unveiled his ‘Build Back Better’ strategy to shift the country to a “high wage, high skill, high productivity economy”. Continued action to tackle unemployment and support job seekers will be instrumental as organisations face shrinking talent pools and a surge in demand for talent driven by digital transformation.
As the furlough scheme ended, job creation and skills shortages were partially addressed by the announcement of more job search support for individuals and extensions of the Kickstart scheme and apprenticeship grant scheme. However, these initiatives, supported by today’s announcement on supporting growth with the “skills revolution” spending package, only touch the tip of the iceberg.
The Great Resignation’ has thrust the skills crisis further into public consciousness, highlighting the need to build – and retain – skilled employees. Organisations need to push ahead with their reskilling efforts to help defend against this ongoing talent crisis, and future-proof both their employees and the wider business. Succession planning is key for identifying and developing future leaders, not just at the top but for roles at all levels. And, critically assessing the future demand for skills and understanding the patterns and obstacles that may affect workforce migration to new skill sets, will ensure HR teams can stay one step ahead as the war for talent intensifies.
Helping charities through the pandemic
With the government set to announce a £3bn “skills revolution” during today’s 2021 budget, Vinay Nair, CEO and Co-Founder, Lightful, a tech for good company powering social and environmental change, explores why more needs to be done to help sectors experiencing critical digital skills gaps, such as the charity sector.
The government’s £3 billion “skills revolution” is encouraging, holding the potential to open up doors for students looking to enter into high-skilled industries. However, we also need to pay attention to the sectors currently experiencing critical digital skills gaps. While the charity sector made good progress with digital transformation in the acute phase of the pandemic, in the prolonged phase of recovery major cracks are starting to appear – and this is largely due to a lack of skills.
As the world moves towards hybrid approaches, digital is the driving force for enabling charities to successfully generate the funds needed to make an impact in communities, influence global policies and create change. The sector urgently needs equitable access to the skills required to make a permanent shift to a hybrid future, where digital is a key part of how we work. More funding in this area is imperative for ensuring that charities of all sizes are able to rapidly reskill and upskill their employees. Only this way will they be in a position to continue the progress they made at the beginning of Covid and build resiliency post-pandemic.
Having a strong charity sector in the UK is crucial for helping us solve some of the most pressing challenges we face today – whether that be recovering from the pandemic, responding to climate change or finding solutions to racial equity. We must listen to its needs and act fast; history will demand it of us.