business focus 17


Chartered accountants Haines Watts presents a series of articles based on its blogs. It offers analysis, reviews and comments and welcomes your feedback at www.hwca.com/blog


of the month


UK economic growth – must try harder writes Simon Garrett, partner at Haines Watts


As an economics student I can remember being lectured on how the UK under-invests relative to other developed economy rivals. Sadly nothing seems to have changed.


According to the Economist magazine, Britain ranks number 159 out of 179 countries by investments as a proportion of Gross Domestic Product (GDP – measure of the size of one’s economy).


We are ranked below Mali, Guatemala and El Salvador and just above Trinidad and Tobago, Sierra Leone and Greece. Britain’s investment has fallen in real terms by a quarter in five years to 13.5% of GDP versus a global average of 24%.


Despite some good economic


news recently, our output is 3.9% below 2008 levels and is the worst amongst the G20 countries, with the exception of Italy.


Recent growth in Britain has broadly been off the back of consumption rather than exports or investment. This is a problem when real wages are falling and are likely to continue to do so unless there is more investment, which would boost productivity and enable real improvement to occur.


We all depend on economic growth to increase our standard of living – and the Government needs it badly to help reduce its debts. So the question is, how to get it?


Maintaining low interest rates via the technique of quantitative


What’s happened to funding for skills training?


A major annual survey by the CBI suggests that UK employers overwhelmingly want more control over training, with qualifications better tailored to their needs. Some 93% of 294 firms surveyed felt they knew best what employee skills they needed. The CBI went as far as to say that skill shortages in key sectors may hamper economic recovery, writes David Podger, managing director of Thames Valley Training & Development


Some 80% of firms said the top priority was better-designed qualifications, more focused on employers’ needs and industry standards. Public money should be focused where training is most needed, says the report.


“The most important thing is to ensure funding flows to the parts of skills provision most helpful to employers, but public resources committed to training and development have often been poorly targeted,” it adds.


At the moment the CBI says


there is little incentive for smaller businesses to invest in training. It calls for the system to be fine-tuned to different sizes of employer with devolved funding and less red tape. In particular it calls for “local training clusters... to enable employers of all sizes to take a leadership role” in training.


Despite the promises from central government to make more funding available to employers, there is very little currently available to SMEs. One of the more imaginative


THE BUSINESS MAGAZINE – THAMES VALLEY – SEPTEMBER 2013


a common location, such as a business park, and can take advantage of training suites on the premises.


We at Thames Valley Training & Development would welcome the opportunity to explore with you ways that you might be able to make your training budget go further by joining forces with neighbouring businesses in your area.


Contact us for further information on the training services we provide to businesses in the Thames Valley.


solutions that has met with some success elsewhere is to pool training resources between unrelated businesses with similar needs but without the necessary volume to commission training on their own. This works particularly well when the businesses share


Details: David Podger 01494-605012 david.podger@tvtd.co.uk www.thamesvalleytraining.com


easing does, in fact, help. The cost of funding investment is kept low and therefore should encourage businesses to invest. Tax breaks for research and development also help. For example, the recent "Patent Box” tax break seems to have encouraged Glaxo, our champion in the pharmaceuticals industry, to increase R&D capacity in the UK as a direct result.


A recent scheme providing cheap money to banks has led to lower mortgage interest rates. There has also been an attempt to provide similar incentives to banks to persuade them to lend to businesses.


With the mortgage market moving again, increased efforts should be made to concentrate on lending/funding and supporting businesses. Lower stamp duty should be given on commercial buildings, more tax breaks are needed for R&D and greater government investment is required – even if this means reducing government expenditure elsewhere.


Details: www.hwca.com


www.businessmag.co.uk


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