ACCA identifies top three themes for Industrial Strategy success

ACCA (Association of Chartered Certified Accountants)

In response to the Government’s call for evidence on the Industrial Strategy Green Paper, ACCA (the Association of Chartered Certified Accountants) has identified three top themes which will be vital for the success.

The highlighted drivers are: bridging skills gaps, digital and infrastructure connectivity and supporting SMEs and driving business growth.

John Williams, Head of ACCA UK, says: "Brexit may have focused the minds of policy-makers on the future of UK trade but we should remember that any Industrial Strategy must include a long-term vision for building up the skills economy and wider business capacity to deal with this kind of activity. Regardless of the outcome of the General Election, these priorities must be central to any future plans for Government strategy.

"Embedded within every business across the country, accountants have an unparalleled insight into the financial security and growth potential of the country’s businesses. Our recommendations have been drawn up from extensive consultation with our members who work in a wide range of businesses across England, Scotland and Wales and so we are uniquely placed to advise Government on this issue.

"The ten pillar approach presents an ambitious blueprint. ACCA’s approach recognises that many of these pillars are interdependent and mutually beneficial; as such, this response centres on three key themes which may encompass one or more of the pillars,’ he added.
The themes and recommendations identified by ACCA are:

1) Bridging Skills Gaps

ACCA’s response indicated that while many businesses wanted to recruit from a diverse social background, there were repeated concerns raised about the work readiness and core technical skills of school-leavers. There was some anxiety that the potential loss of European Social Funds could significantly impact on regional skills pipelines.

ACCA recommends:

• Trialling schools and businesses networks in new opportunity areas identified by the Department for Education and managed through intermediaries such as Local Enterprise Partnerships and the Careers Enterprise Company to open up more work experience opportunities giving students the opportunity to explore different career paths and making under-graduates ‘workplace ready’.
• Ensuring apprenticeships offer flexible career paths on a par with under-graduate study routes by focusing on transferable skills and insisting that the target of 3 million apprenticeships by 2020 is met through completions, not starts.

2) Connectivity- digital and infrastructure

Members UK-wide noted that businesses were restricted to certain office locations due to a lack of serviceable internet connections. Improved digital connectivity can expand the talent pool businesses are able to recruit from and do business with, including with international partners. Regional interconnectivity was a reoccurring theme, as members highlighted the need for better connections within regional powerhouses. The overwhelming message was that the Northern Powerhouse agenda had largely been focused on Manchester but without connections to other northern cities, the rest of the region would not be able to reap the rewards.

ACCA recommends:

• Superfast broadband roll-out and minimum speeds for rural areas allowing businesses to seek out cheaper rents and business rates and improve the over-spill of prosperity in the regional powerhouses
• Connecting UK regions, with particular responsibility on the new generation of Metro Mayors to build local partnerships which support growth and development

3) Supporting SMEs and driving business growth

Members reported that SMEs struggled to access advice on cross-border trade. Businesses also were reluctant to enter into partnerships in the public sector due to the uncertainty caused by response times. Access to finance, especially for SMEs, was also cited as a national concern.

ACCA recommends:

• Helping businesses trade internationally, by embedding cross-border business skills courses into education programmes and international trade opportunities signposted by Department for International Trade.
• Efficiency of public/ private sector project timelines: To allow businesses to effectively manage cash flow and explore alternative sources of finance for projects, there should be a minimum response time of 8 weeks once an application for public funding/ partnership is submitted
• Expanding finance options for SMEs: A central government SME distress fund that could allow companies to apply for viability assessments to access finance for restructuring could reduce SME closures. Additionally, SMEs may benefit from a non-payment insurance product to bolster lenders’ confidence and safeguard against changes in financial circumstance, particularly as the economic climate becomes increasingly unstable

ACCA’s response to the consultation was drawn up through member’s roundtables held in Cardiff, Glasgow and Manchester as well as consultation meetings in Reading and Birmingham.