By Claire West

UK businesses have become markedly more risk averse in the last three years, according to a recent poll of finance professionals.

Forty-five per cent of firms surveyed admitted they will prioritise risk management over growth next year. Just over one-third of companies said this was the case for their businesses three years ago.

The growing sense of corporate caution in recent years was also reflected in the finding that 47 per cent of businesses aim to reduce their debt levels next year, compared to 40 per cent in 2008. More than half the companies surveyed intend to cut costs by more than 10 per cent in 2011, compared with 35 per cent who targeted such cost cutting measures in 2008.

The survey, conducted by Accountancy magazine in conjunction with RBS Corporate & Institutional Banking, asked respondents to compare their business strategies for 2011 with the plans they had implemented in 2008. More than 620 finance directors and accountants working in a range of commercial and not-for-profit organisations were polled.

Ken Barclay, managing director, RBS Corporate Coverage UK, said: “The results of the survey reflect the shifting priorities for businesses over the last couple of years and highlight something of a Catch-22 scenario for the UK economy. The recovery will in part be driven by business confidence and investment, but until the outlook becomes more certain a significant number of firms remain more focused on cash generation than on growth, which makes a swift recovery more difficult to achieve.

“However, most customers I speak to remain cautiously optimistic about the future. That said, where increased volatility exists, it is to be expected that businesses will do everything possible to mitigate risk. For many, in the short-term at least, that will take priority over longer term growth ambitions.”

Sally Percy, editor of Accountancy magazine, said: “This research suggests that managing costs and risk will continue to be key areas of focus for businesses going into next year.

She added: “Businesses are worried about the possible impact of public sector spending cuts on their bottom lines and will be proceeding cautiously as a result of this.”