CIMA made a set of recommendations to the UK government in advance of Chancellor Rachel Reeves’ 2025 Spending Review.
“With the UK still lagging in productivity compared to its peers, contending with widening skills gaps, and navigating a challenging global economic environment, this Spending Review is crucial,” Andrew Harding, FCMA, CGMA, CIMA’s chief executive–Management Accounting at the Association of International Certified Professional Accountants, said in a news release. “The Chancellor must set out the mid- and long-term plans to help UK businesses drive the growth the economy urgently needs.”
The government’s Spending Review is scheduled to be released Wednesday.
“Our proposals, focused on removing tax cliff edges, increasing investment, enhancing skills and productivity, have been designed to help UK businesses expand and grow, and support the government’s core mission of delivering economic growth,” Harding said.
The recommendations include:
- Introducing a productivity strategy and creating a dedicated Productivity Commission similar to the ones in New Zealand and Australia.
- Addressing fiscal drag, which according to AICPA & CIMA research, limits productivity by pushing people into higher tax bands as a result of inflation.
- Enhancing productivity measurement in the public sector. AICPA & CIMA research shows that the public sector currently lags behind the private sector when it comes to tracking and improving productivity.
- Extending Full Capital Expensing to include second-hand equipment, enabling more businesses, particularly small- and medium-size entities (SMEs), to access the scheme.
- Creating an SME Investment ISA to encourage investment in and support the growth of UK SMEs.
- Reintroducing the Growth Accelerator Scheme for SMEs.
The Spending Review is expected to set out government departments’ day-to-day spending for the three years from 2026–2027 and investment spending for the four years from 2026–2027 to 2029–2030.
— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com.
