In a letter sent to the Chancellor ahead of the Spring Statement, ICAEW called for a “step change” in how the government chooses to invest, with greater emphasis placed on unlocking private investment. 

Seven in 10 (72%) ICAEW members polled called for better targeting of investment to lower the cost of capital for difficult infrastructure projects, rather than replacing capital on projects the private sector is likely to invest in anyway. Further, 85% of members said poorly-targeted government investment risks displacing private sector funding without generating additional economic benefits.

ICAEW also urged the government to prioritise investment in skills and abandon policies that could undermine economic growth, such as the reported scrapping of funding for Level 7 apprenticeships, which 46% of members said would impact their organisation. 

Removing funding would not only lead to an immediate reduction in apprenticeship starts but could result in lower tax revenues (according to 37% of members polled), reduced business advice (47%) and increased offshoring (41%). The impact would be particularly severe for SMEs that rely on funding (48%), as well as on those from disadvantaged backgrounds who use Level 7 as a route into the profession, the Institute added. 

Also in the letter, ICAEW called on the government to explore a new iteration of its business growth voucher scheme to boost growth in technology and artificial intelligence. Half of members polled said a voucher scheme would lower financial barriers to AI adoption.

Alan Vallance, ICAEW Chief Executive, said: 

“There must be a step change in the way the government invests if it is serious about kickstarting the economic growth needed for the UK to be the fastest-growing economy in the G7. The evidence is clear – our members have told us that investment, when poorly targeted, can crowd out funding from the private sector.

“A smarter approach to investment, which focuses on unlocking private funds and prioritises spending on skills, technology and infrastructure, would be a smarter use of taxpayers’ money. Meanwhile, the biggest barrier to AI adoption among our members is concern about risks and reliability – this must be tackled head on so we can harness its potential faster.

“A highly-skilled workforce is fundamental to achieving growth, and to achieve this businesses must be encouraged to invest in skills. But scrapping funding for Level 7 apprenticeships would undermine this ambition and be a hammer blow to the thousands of people from less advantaged backgrounds who use this route into a professional career. 

“If confirmed, the removal of Level 7 funding would also fly in the face of the government’s commitment to its growth agenda, contradicting its own decision to include professional and business services as a key sector in the new industrial strategy. Such a decision could result in many new UK jobs being potentially lost abroad to offshoring, so we urge the government to rethink this approach.” 

ENDS

Notes to editors: 

ICAEW polled 380 members between 17 March and 24 March 2025. Over 160,000 ICAEW members are making investment decisions and driving growth each day. 

ICAEW members advise over three million businesses in every sector and region of the UK, and 84% of the FTSE100 have an ICAEW Chartered Accountant on their board.