Budget falls short of managers' expectations

22 April 2009

CMI response to the 2009 Budget

The Chartered Management Institute (CMI) says the Government has missed its chance to tackle the recession by creating a Budget for carbon not careers. Responding to the Chancellor’s announcements, the CMI argues that his measures will create short-term relief for a select band of workers, but offer little hope for long-term growth.

Ruth Spellman, chief executive of the Chartered Management Institute, says: “Whilst welcoming the Chancellor’s determination to protect young people from unemployment and the possibility of creating a lost generation, the Budget misses the opportunity to tackle skills shortages across the workforce. There is a risk that by guaranteeing employment and training for those under 25, the measures will simply displace problems of re-skilling and unemployment to another part of the job market.”

The Chancellor says that this is a Budget to “create hope for the future”. However, the CMI’s latest Economic Outlook survey suggests that managers’ hopes will be dashed by today’s announcement. Prior to the Budget, managers across all industry sectors said that “skills are key to competitive success” – little wonder 85 per cent were seeking tax breaks to support investment in skills and training.

Spellman continues: “The Chancellor should have considered offering a tax break for employers providing development to their staff. After all, employers are best placed to identify who needs re-skilling, up-skilling or redeployment. They need to have the financial support to tackle skills shortages, but the autonomy to decide what training will keep them in business.”

She concludes: “In the targeted help for businesses, we welcome the proposals to increase capital allowances to 40 per cent in growth sectors. However, people costs are the biggest costs that most businesses face. The Chancellor has missed an opportunity to back policies that reward investment in people and lay the foundations for long-term, sustainable growth.”

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