Business leaders welcome budget, but want more answers

22 June 2010

In today's budget report, the chancellor announced measures designed to stimulate business growth, but whilst many of his proposals will be supported by the UK's management and leadership community, questions remain over how some cutbacks will play out in reality.

The Chartered Management Institute's (CMI) own Economic Outlook report shows that 71 per cent of managers in the private sector think the government is right to accelerate deficit reduction and 42 per cent support moves to reduce business taxation. Against this, however, is the belief – amongst 81 per cent of managers - that employers need greater support developing the skills needed to better handle growth, when it comes.

CMI chief executive, Ruth Spellman, says:

"It is very telling that UK managers are most vocal about skills development. Of course, they welcome moves to manage the tax burden on business, but there is a clear message that no matter what the economic conditions, UK plc has no hope of a quick recovery or renewed competitive success without a skilled workforce at its helm. After all, if government and business can combine forces to address the skills deficit, it will be a step in the right direction to tackle the budget deficit.

"There is, however, a fear that many of the proposed cuts will see arbitrary swinging of the axe across management levels, with little thought about the consequences. Yes, there have been too many examples of catastrophic leadership failures across the private sector and the NHS, and the government is right to act now before more bad management costs lives. However, the desire to cut costs should not just be about imposing random reductions at management level. Now is the time to focus on removing managers whose capabilities fall below the first class standards that the consuming public have a right to expect. We need answers about how costs can be cut without cutting corners, and that enable us to invest in high quality managers who can drive the necessary public sector reform agenda."

CMI has also welcomed the chancellor's plans to open a public consultation on the Default Retirement Age.

Spellman says: "Forcing people to retire simply because there is an arbitrary belief that they have celebrated one birthday too many is a ridiculous state of affairs. In an environment in which organisations are crying out for a better skilled workforce, it makes no sense at all to lose talent and experience simply because of a birth certificate."