In his customary letter to the Chancellor ahead of the Autumn Budget, ICAEW’s CEO Michael Izza has urged the government to ensure that the UK’s recovery post-COVID delivers strong and sustainable local economies across the country.
“This Budget is an opportunity to set the UK on the path to the fullest possible economic and environmental recovery – one which levels up all parts of the country, tackling entrenched regional inequalities,” he wrote.
Izza argued that the levelling up agenda must be planned and delivered “in lockstep with the UK’s transition to net zero”, outlining key areas where ICAEW believes the government should take action in the Budget on 27 October.
The first is in supporting small businesses to enable “net zero transformation”, with ICAEW calling for new programmes building on the successful Help to Grow initiative. Such support must align with net zero targets and planned changes to tax measures, according to Izza: “This will allow businesses and taxpayers to make long-term decisions, to lift their eyes from the short-term and invest in the future.”
Delivering on net zero ambitions will also require government spending on green infrastructure at the local level, argues ICAEW, covering small transport and housing initiatives, alongside national projects.
ICAEW also believes that government should move away from the model of bidding for centralised pots of funding for initiatives to deliver economic growth and environmental benefits. Instead the government should commit to delivering longer-term funding for local councils to work with businesses and deliver the transformation needed in their local area.
Such funding must, however, be coupled with “strengthened financial management” in the public sector and “reformed governance and audit” in local authorities.
Finally, Izza argues that the government must take action to broaden access to private sector investment to SMEs, leveraging the City of London’s position to act as a finance conduit to businesses across the UK.
“The inability to access regional finance is frequently raised by ICAEW members and as a barrier to scaling up,” he said. “Government must address this issue… including supporting the development of open digital platforms – which make it possible to seize the economic dynamism of all entrepreneurs.”
Michael Izza’s letter to the Chancellor is one of three that ICAEW has sent to government ahead of the Spending Review and Budget next week.
ICAEW’s Tax Faculty wrote to the Financial Secretary of the Treasury calling for the Autumn Budget to accelerate work to build a modern tax system, and the Public Sector team wrote to the Chief Secretary of the Treasury urging for the Spending Review to be centred on stable funding, fiscal resilience and financial capability.
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