Government needs to focus on performance, not only cost, says ACCA

ACCA (the Association of Chartered Certified Accountants) responds to the autumn budget for 2018

Overall Fiscal Position

Michael Taylor, head of economic analysis at ACCA said:

“Brexit uncertainty, the forthcoming Spending Review and the Government’s lack of an overall parliamentary majority suggested a cautious Budget today and Mr Hammond duly delivered.

“Despite this, better than expected borrowing numbers allowed the Chancellor to announce some increases in spending in politically sensitive areas while credibly claiming to meet his fiscal rules. He could also do this without significant tax increases, which ACCA welcomes. The Office for Budget Responsibility (OBR) reduced its forecast for public sector borrowing by £11.6bn to £25.5bn for this year (2018/19) and by £2.1bn to £31.8bn in 2019/20.

Meanwhile, the OBR’S GDP growth forecasts are little revised at 1.6% for next year and 1.4% for 2020. The 2019 figure – along with many other of today’s Budget projections – may be subject to significant revision depending on the final Brexit outcome.”

Managing an end to austerity

Alex Metcalfe, head of public sector policy at ACCA said:

“The Chancellor has committed to increase public sending in real terms, but there needs to be a shared vision of what it means to end austerity. The Chancellor rightly points to next year’s Spending Review as the time for making the big decisions for the public purse.

“Looking ahead, the policy of ring fencing some public services, at the expense of others, needs to end in the Spending Review. Departments, like the MoJ, have seen real-term cuts of 40 per cent. Some public services, such as prisons and adult social care, are already seeing significant pressure and deterioration. An end to austerity will require the Government to take a systems approach, understanding the interactions between public services, while also focusing on service performance, not just cost.”

Universal Credit

Alex Metcalfe, head of public sector policy at ACCA said:

“The Government has made the right first step by injecting more money to smooth the transition and increase the work allowance. Now the Government needs to consider how to properly fund this fundamental reform.

“It is right to limit the marginal rate faced by lower-income people entering work, but the overall benefit cuts from this reform are ill-considered. A fundamental reform of the UK’s benefit system cannot be a front for deeper benefit cuts. The Government needs to address the challenges faced by many lower-income families that will be made worse off under the new system.”

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About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 208,000 members and 503,000 students in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 104 offices and centres and more than 7,300 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com

"The Chancellor has committed to increase public sending in real terms, but there needs to be a shared vision of what it means to end austerity. The Chancellor rightly points to next year’s Spending Review as the time for making the big decisions for the public purse"

Alex Metcalfe - head of public sector policy