Ahead of the Spring Statement tomorrow (26 March), ICAEW asked members to share their thoughts on what the government should be doing to incentivise economic growth.

The results reiterated three key priorities outlined by Alan Vallance, ICAEW’s Chief Executive, in his letter to the Chancellor of skills, technology and infrastructure investment.

Of the 380 ICAEW members who completed the survey, 85% believed that poorly targeted investment from the government risked displacing private sector funding while not generating additional economic benefits for the UK.

Meanwhile, 72% confirmed that government investment had to be better targeted to lower the cost of capital for difficult infrastructure projects, rather than simply replacing capital on projects the private sector is likely to invest in anyway.

“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,” said Vallance. "The evidence is clear – our members have told us that investment, when poorly targeted, can crowd out funding from the private sector."

He continued: “A smarter approach to investment, which focuses on unlocking private funds and prioritises spending on skills, technology and infrastructure, .”

Vallance also highlighted the need for support for investment in technology: “The biggest barrier to artificial intelligence (AI) adoption among our members is concern about risks and reliability – this must be tackled head on so we can harness its potential faster.”

Close to half of the members polled (49%) agreed a voucher scheme would lower financial barriers to AI adoption.

Impact of Level 7 funding on skills

The poll results also reiterated the need for the government to consider policymaking at the broadest level, with a significant number of respondents agreeing that changes to Level 7 Apprenticeship Funding will have impacts on access to skills and growth.

Of those polled, 46% of said the changes would impact their organisation, and other impacts were also predicted:

• 41% said it would increase offshoring;
• 37% said it would lower tax revenues; and
• 47% said it would reduce business advice.

“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,” said Vallance.

“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.”