“Disappointing” or “a positive step forward”? Mixed feelings as businesses react to the Chancellor’s spending review
Businesses and organisations across the country have reacted to the government’s spending review earlier today.
Chancellor of the Exchequer Rishi Sunak outlined the government’s spending plans for 2021, including the rise of minimum wage, expected unemployment figures and investment into the NHS.
Bdaily spoke with key business leaders across our regions to get their views on the review and what it means both locally and nationally.
Adam Marshall, director general at BCC
“This spending review comes at a critical time as business communities are fighting for survival in the midst of the coronavirus pandemic.
“The launch of the National Infrastructure Strategy is an important step in overcoming the longstanding infrastructure deficit. We’ve spent long enough discussing infrastructure projects - it’s now time to focus on delivery.
“Measures to help people return to work at this challenging time will help limit long-term unemployment but government must waste no time in putting these plans into action.
“Government and business will need to work together to re-train and re-skill the UK workforce. Investment in the Kickstart Scheme, in which Chambers are playing a leading role, and the launch of the Restart scheme, will be critical in helping to achieve that.
“With an uncertain winter ahead, the government will need to maintain an open mind on providing further support to businesses struggling to survive.
“As we look to rebuild and renew local and national economies, businesses will also need further significant incentives for investment in people, productivity and the planet.”
Nigel Wilcock, executive director at the Institute of Economic Development
“There are no surprises in what the Chancellor has had to say, but like the household that avoids opening credit card statements, nobody wants to stare at the hard reality. Nevertheless, the funding review is disappointing in one regard irrespective of the financial black hole.
“The time has come for a different and radical compact between central and local government. Small scale bail out funds for local government are too small to make a difference – but also completely miss the point.
“Covid has shown that local government is essential in delivering services for communities and we need a blank sheet of paper approach in devising the funding mechanisms and terms of reference between our capable local councils and a Whitehall that has long been fearful of losing its control.”
Dr Joe Marshall, chief executive of the National Centre for Universities and Business (NCUB)
“The Chancellor has today taken a positive step forward, committing to spending almost £15bn on research and development (R&D). He has rightly acknowledged that R&D is paramount in the nation’s recovery from Covid-19.
“Whilst almost all announcements made today offered funding for one year only, the Chancellor sent an important signal of the importance of steady, long-term funding for research.
“He made a multiyear commitment for an uplift of more than £400m on average for UK Research and Innovation per year for the next three years. Further investment in UK research will allow us to build a more resilient, productive and innovative economy.
“Indeed, news of the vaccine in the last few weeks alone demonstrates the social and economic value of R&D, and we are pleased the Government have realised this. For every £1 spent in R&D, £7 is made in economic and social benefits from helping to attract investment, boosting productivity and creating new jobs.
“The power of investing in UK research simply cannot be underestimated, but equally the Government must also support investment in research development and innovation.”
Lucy Winskell, chair of the North East Local Enterprise Partnership (LEP)
“Today’s Spending Review has set out the scale of the challenge we face to recover from the economic impact of COVID-19. The Chancellor is expecting to see a decline in economic activity and rise in unemployment with a long-lasting impact for many years.
“He is therefore right to focus on the recovery of the labour market with support for those who lose their jobs or need to retrain and to focus on the levelling up of the UK economy. We look forward to more details about the Levelling Up Fund and the early stages of the UK Shared Prosperity Fund.
“We welcome the confirmation of the financial package to support the 10-point plan for a green industrial revolution. The North East has a strong role to play in delivering this plan.
“The proposed recovery and renewal plan set out by the North East COVID-19 Economic Response Group sets out our plan to address the challenges we face in our region and we will work closely with government to seek the best outcomes for our residents and economy.”
Dan Jarvis, Mayor of the Sheffield City Region
“At the moment we needed government to deliver a New Deal for the North, the Spending Review lacked clout, coherence and continued to tinker at the margins – when a wholesale transformation was needed to rise to the challenge of the biggest economic upheaval in generations.
“Instead of delivering levelling up, the Chancellor put it on hold with unnecessary pilots that pits regions against each other in bids for piecemeal pots of funding.
“We needed a substantial, devolved and ambitious Shared Prosperity Fund to kick start economic recovery and renewal across the North. In South Yorkshire, using the Local Growth Fund, we have created and protected thousands of jobs, improved worker’s skills, built new infrastructure and attracted world-leading firms.
“I have long called for the Green Book to be rewritten, and this is a welcome change. Yet the long-arm of the Treasury continues to tighten its grip.
“The Government previously told Metro Mayors we would lead the economic recovery, yet the Levelling Up Fund and Restart schemes involve more top down control. It is another flawed attempt to deliver the recovery from Westminster.
“Instead, Ministers need to let go and back local leaders with investment and powers so we can get on with the job and drive the transformation of our economy from the North, rather than a desk in Whitehall.”
Claire Bennison, head of ACCA UK
“ACCA welcomes the government’s focus on job creation and the extra money for mental health services, as the country battles the harsh effects of the global pandemic.
“A focus on jobs requires an equal focus on skills. There is now a unique opportunity for a more ambitious lifelong skills plan that will nurture the modern, digital and technical skills for all people needing to retrain and upskill in resilient sectors, such as financial services.
“We would like to see public and private sector partnerships to deliver skills quickly to those in need. Having qualifications that are portable and recognised by professions and trades is now more important than ever.
“This is a pivotal moment for the government to reshape the post- Covid economy and boost careers training and skills development.
“Additional funding for SMEs to take on apprenticeships is welcome, but for many of them a one-off payment does not go far enough to incentivise new recruitment and they would like continued support against long-term costs, such as wages for new starters.”
Mike Cherry, national chair of Federation of Small Businesses (FSB)
“A government which claims to be pro-enterprise had very little to say today about the importance of business and private sector job creation.
“This Spending Review was a missed opportunity to help small business owners – not least those who have been excluded from support measures – and brings the need for a pro-business Spring Budget into focus. Rather than being a tax-raising Budget, it must have growth and recovery at its heart.
“Depending on the spread of Covid and restrictions over the coming months, very significant interventions may well be needed far sooner than the Spring. We will at least need to see meaningful action to spur business and job creation by the time the furlough scheme is reviewed in January.
“The economic forecasts outlined today are stark. Our hopes of recovery will hinge on the success of small businesses. We need to see far more from this Government where reducing tax on enterprise, facilitating start-ups and bringing down operating and employment costs are concerned.
“That said, commitments to a new UK infrastructure Bank, Levelling Up Fund and UK Shared Prosperity Fund are good to see. We’ve always said that replacing EU funding for business support would be critical as we move to a new relationship with Europe, and our recommendations have been taken on board.
“It’s vital that – as these new initiatives are rolled out – small firms are brought into the supply chains of capital expenditure projects and paid on time.
“The announcement of measures to aid the sharing of apprenticeship levy funds with small firms down supply chains marks an important step forward.
“For too long, our transport, broadband and mobile infrastructure has lagged behind other major economies. We welcome efforts to tackle this issue head on.
“The government has listened to the expert Low Pay Commission where the National Living Wage is concerned, and that marks the right approach.
“We’ve heard an awful lot about government debt today. We should also remember that previously thriving small firms have had to take on significant borrowing to keep the show on the road and pay for safety measures.
“Come the Spring, when repayments start to fall due, many will be extremely stretched. A pro-business Budget at that juncture will not just be important, but essential.”
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