By Marcus Leach
The majority of businesses in the UK believe the economy will have less reliance on the public sector over the next decade.
However, they are yet to be convinced of the ability of politicians to reduce tax, red tape and the deficit, according to ‘Politics and the Economy 2021’ research released today (Monday) by Barclays Corporate.
The research, in which 660 business leaders were polled on the political conditions they expect their businesses to face in a decade, found that companies were resigned to the fact that they would be dealing with more red tape (64%) and higher taxes (61%) in a decade.
However, businesses are also planning for a less public sector focused economy, with 59% of business leaders predicting the UK will be less reliant on the public sector versus just 26% that believe the economy will have a greater reliance on the public sector.
There is significant regional variation in attitudes to this, with South West businesses most confident of a move away from public sector reliance, compared with the North West which is on balance the only region expecting an increase in the influence of the public sector in the economy. The vast majority of media and technology companies predict less reliance on the public sector as do the majority of healthcare companies. Conversely manufacturing is the only sector that believes there will be an increase in public sector reliance over the next decade.
“The fact that most businesses are looking to private enterprise for growth in the UK is welcome news. While central and local government is a key source of income for companies around the UK, these results underline the fact that relying on the public sector alone is not a recipe for success over the coming decade,” Kevin Wall, Managing Director, Barclays Corporate, commented.
UK businesses are divided on whether infrastructure and the state education system will be more or less able to support the needs of the business environment.
Northern Ireland and the North West are most hopeful of improvements around infrastructure, while the South West on balance sees infrastructure as being less fit for purpose by 2021. Wales and Eastern England are most positive about the education system.
“With businesses divided over whether infrastructure and education will be fit for purpose in a decade, companies must be proactive in advocating what infrastructure investment and education policy they believe will best facilitate growth for their region in the coming decade,” Kevin Wall continued.
Two thirds of British companies (64%) believe a budget surplus in the public sector will not be achieved by 2021, with the largest companies least confident of a surplus being generated.
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