Budget 2012: Managers will be paying close attention to the Budget
Petra Wilton, director of policy and research at the Chartered Management Institute, says skills remain a priority for managers watching today’s Budget.
Around half of the UK’s managers expect the UK to slip back into a double-dip recession, according to interim findings from the latest edition of CMI’s twice-yearly ‘Economic Outlook’ survey. So there is no doubt that managers will be paying close attention to the measures announced by the Chancellor in this year’s Budget as he seeks to reinvigorate the UK’s economic growth.
The most popular policy option consulted on by CMI has consistently been tax incentives to encourage employer investment in skills. There is mounting evidence that the UK is under-performing when it comes to management – and under-investing in developing management and leadership skills, when compared to many competitors.
Our recent report with Penna,
The Business Benefits of Management and Leadership
Developmentfound that best-practice management development was linked to a 23% variance in organisational performance. There may not be money in this year’s Budget for tax give-aways but managers will welcome further initiatives from the government to make sure that skills are at the forefront of the growth agenda, especially for smaller and medium sized businesses.
The skills agenda is also critically important to the public services reform agenda, especially as the service delivery landscape becomes more diverse and more localised. We hope the chancellor will ensure that the sector’s significant spend on management skills is maintained and that its value is improved through more effective evaluation. The recent backing for the Major Projects Leadership Academy is a welcome move but with the National School of Government set to close, further action may be needed to ensure that management and leadership skills are not neglected.
Of course, interest in tomorrow’s Budget will extend to the wider tax environment for business. CMI’s research shows that there is a strong appetite for tax cuts and simplification, with many managers backing cuts in business taxes in general and, specifically, opposing next month’s planned increase in business rates.
Many managers are also facing pressures as a result of the cost of energy, which was the number one concern over the last year. Decisions on fuel duty will be watched closely. At the same time there are also big questions about the investment needed to keep Britain’s businesses competitive. This week’s focus on transport infrastructure is likely to be welcomed, with around three quarters supporting investment in transport infrastructure.
Despite the concern about the possibility of a double-dip recession, our initial findings also suggest that managerial optimism is beginning to pick up after a long slump. Most managers believe that the government is on the right track in its approach to cutting the deficit. The chancellor's task will be to deliver a Budget which balances the commitment to deficit reduction with the need to boost growth and inspire managers with the confidence to drive performance in their organisations around the country.
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