By Claire West
Chancellor George Osborne has announced cuts of £11.5bn to Government departments in 2015/16, but what do the business community think of the speech made today?
Business Secretary Vince Cable said:
“I made it clear that I would fight for a deal that ensured the government had a credible growth story. The settlement we've achieved for this spending round does exactly that by prioritising and protecting activities that are key to growth. We have secured a robust funding package for science and innovation, skills and apprenticeships and more money for the regional growth fund, creating jobs outside of London, and the Green Investment Bank.
“We are also unique in having a two year capital funding guarantee, with a three year guarantee for science funding, giving business the certainty it needs to invest alongside government commitments.”
Charlie Mullins, MD of Pimlico Plumbers, commented:
"Whilst it’s unfortunate that the agenda has been delayed, no one can deny we are living through a challenging period. It’s a tough world and we are one economy amongst many.
"We are witnessing fledgling growth in the economy whilst other countries are flailing, and for me this is proof that the policies of the last three years are starting to pay off. For too long spending was running out of control and running our country into the ground, and that’s why these spending cuts are harsh, but necessary.
"From a business perspective, I have long said that apprentices can help fill the skills gap in the UK, and I’m pleased to see an increase in spending on apprenticeships — although details are scarce at the moment. Let’s see the increase in capital spending promised to the business department spent on supporting SMEs who are at the heart of UK enterprise. It is SMEs that will be the foundation for the type of growth that will have tangible benefit for the majority.
The decisions around the cuts can’t be easy but George Osborne has my backing and it looks like we are starting to move in the right direction."
Simon Hill, MD of idea management startup Wazoku believes that today’s Spending Review offered only qualified encouragement for the business community to help kick-start the economy:
“George Osborne said today that Government spending does not produce sustainable growth, enterprise does. This is true but enterprise needs help and encouragement and whilst there were positive announcements around transport and apprenticeships I saw few signs of an overall vision for UK enterprise in today’s speech.
Innovation and entrepreneurship are hugely important to the future growth and development of the UK economy yet there will be just £10bn Local Enterprise funding over the next parliament, significantly lower than the recent recommendations in Lord Heseltine’s ‘No Stone Unturned’ review.
This Government is good at PR-friendly policies for business such as the recent £1m prize for its ‘grand innovation challenge’, but less so when it comes to providing current and tangible support for the business community.”
Emily Coltman ACA is Chief Accountant at FreeAgent, which provides an online accounting system for freelancers and small businesses. On today's spending review she commented:
“HMRC stand to have their resource budget cut by 5%, and the Chancellor expects to collect over £1bn more in revenue by countering tax evasion and avoidance. I would have liked to see detailed plans for how this will be achieved. As a user HMRC's service already seems pretty stretched — I’d be curious to see how they can achieve this cut in budget, proactively collect more revenue and provide a good service to businesses who want to make sure they have the information they need to keep on the right side of the tax man.”
"Council tax is to be frozen for 2 years. This is good news for home-based businesses but it would have been even better to encourage business growth as well, with a freeze in business rates and a further extension to small business rate relief."