Tag Archives: Comment

Accountancy

ACCA’s response to small business strategy

Glenn Collins, head of technical and strategic engagement, ACCA, said: “ACCA applauds the government for acknowledging the vital contribution that small and medium sized business (SMBs) make to the UK economy. We look forward to seeing the detail in the new small business strategy.

 

“We also welcome that this recognition of the challenges facing small businesses is being backed up by action – action that ACCA and its members have been calling for loudly and consistently over many years.

 

“Late payment is a persistent problem that is crippling SMBs, so more robust action is warmly welcome. ACCA previously called for stronger powers for the Small Business Commissioner in addition to greater corporate responsibility for prompt payment. However, we recognise that this is a complex issue and further detailed discussions will be required to ensure new legislation is both practical and effective for businesses.

 

“Access to finance is a demonstrable barrier to growth and a source of constant frustration for growing enterprises. Therefore, boosting start-up loans looks like welcome news. We know as key advisers to small firms, our members will be working hard with the business community to access the finance they need at the time they need it. In particular, we welcome the Bank’s flagship Growth Guarantee Scheme, established in August 2022, which has been extended through the Spending Review period to 5 April 2030. This puts the scheme on a long-term footing and gives finance providers and smaller businesses certainty about its future. We know our members are integral to making sure that this scheme works as intended.

 

“At a time when our ongoing research shows business confidence is at a low ebb, we hope that this positive action to tackle longstanding barriers to small business growth will provide a much-needed boost of confidence.”

Business, Business Advice, Business Finance, Economy & Jobs News, Politics, South Wales

Chambers Wales South East, South West and Mid comments on Spring Statement 2025

Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said:

“As expected, there was not much in terms of new announcements in the Chancellor’s Spring Statement today. The OBR forecasts highlight economic concerns already familiar to most businesses in Wales. Inflation concerns have not yet disappeared and there are worries about business and consumer confidence.

“Infrastructure and housing falls within the remit of the Welsh Government and like the rest of the UK, Welsh businesses support the prioritisation of simplifying the planning system but are keen to see the proof of this with spades in the ground. The industrial strategy and increased defence spending we hope will have a positive impact in Wales where the manufacturing and defence industries have a significant presence. Infrastructure investments are proven to boost economic investment, and channelling more spending out of the civil service and directly into infrastructure and increasing the amount of funding available to Wales is also welcome, providing the right projects are chosen.

“It is difficult to see any significant improvement in confidence and investment driving economic growth without capital investment led by the government. The government remains bound by fiscal rules that I would argue ignore the economic impact of borrowing to fund capital investments. Part of the problem has been the lack of any robust return on investment analysis on government spending.

“Consumer confidence remains hamstrung by a two-tier economy. The success of healthcare, welfare, and employment reforms will hang on whether they manage to improve overall employment and wage growth; this will be a big test over the next 12 months. The government has been clear that this is how it expects to be judged in the long term.

“Business owners are facing significant headwinds, the full impact of which we are yet to see. The economy could break out of these headwinds but the government will need to lead the way – just cutting spending will not change much, reform needs to achieve change.

“Global trade remains the government’s other major challenge. At the moment the government is trying to balance its relationship with the US and EU and whether events will force them off the fence one way or another remains to be seen. With domestic demand static, growth may be dependent on how the global trade environment now evolves.”

Accountancy & Accounts, Business, Business Finance, Economy & Jobs News, Finance and Banking

ACCA Cymru/Wales comments on the Spring Statement 2025

Lloyd Powell, head of ACCA Cymru/Wales, said:

 

“ACCA’s data from SME financial professionals highlighted plummeting business confidence in recent months, largely driven by increasing costs. Today’s statement didn’t contain any additional measures that will impact upon business, but this year’s lower growth forecast, cost increases and the knock-on impact on inflation will do little to boost confidence and investment.”

Accountancy & Accounts, Business, Sustainability

ACCA gives cautious welcome to EU sustainability changes

  • Global accountancy body says Omnibus Directive needs careful consideration

 

The European Union (EU) has proposed changes to some of the requirements in the European Green Deal, as set out in the Omnibus Directive  published recently.

 

The proposals are intended to reduce the number of companies required to publish details about their sustainability; to reduce the number of matters that companies will need to disclose; and to delay implementation by a year when many of these companies will be required to make the disclosures.

 

It will also reduce the number of companies required to audit the sustainability of their supply chain, and to limit the information required from SMEs.

 

Leading global professional accountancy body ACCA welcomes the intent behind the Omnibus Directive, which is intended to save cost, reduce the burden on smaller businesses, and make European companies more competitive.

 

ACCA has long supported the implementation of robust sustainability reporting frameworks and standards, and championed voluntary disclosures by companies around the world. ACCA is supporting accountants and businesses both within and outside of the EU with their understanding and compliance with the Corporate Sustainability Reporting Directive (CSRD).

 

Setting out an initial reaction to the Omnibus Directive, Mike Suffield, Director of ACCA’s Policy and Insights, said: “While we welcome the intent of the Directive, businesses need consistency, clarity, and certainty; the Omnibus Directive needs careful consideration to ensure that it delivers on these requirements, while acknowledging the need to drive climate action.”

 

The global accountancy body added that there is a need to maximise interoperability of sustainability reporting requirements in Europe with the IFRS Sustainability Disclosure Standards. It added it is vital that risks of the Omnibus Directive creating further divergence between the two reporting frameworks is minimised, to avoid greater friction to global markets.

 

Suffield further commented that: “ACCA will be analysing the Omnibus Directive in greater detail to fully understand the impact on our global membership and our partners. We stand ready to assist the EU in their development and implementation of proposals, and to ensure globally consistent and clear sustainability reporting requirements for business.”

 

Visit ACCA’s website for more information.

Accountancy & Accounts, Business, FInance, Finance and Banking, Finance News

Inflation rises to 3%

Gus Williams, interim CEO at Chambers Wales South East, South West and Mid, said:

“Today’s announcement that inflation has risen to 3%, its highest level in 10 months, will not be the news businesses were hoping for, but is in line with my view that some inflation projections are overly optimistic.

“The rate, combined with wage inflation figures, highlights the inflationary pressures in the economy and the challenges facing businesses. Although we expect interest rates to come down, there is not a clear path as to how quickly they will reduce and businesses should be cautious about relying on optimistic forecasts.

“While over a third (36%) of businesses in Wales cited inflation as a concern in our Quarterly Economic Survey for Q4 2024, 78% were concerned by taxation. Within the next few months, businesses will be facing rises in employer national insurance contributions and the National Minimum Wage, significant labour costs which could fuel inflation to rise further.

“Businesses will be following upcoming announcements and fiscal events with the hope that cost pressures can be eased, enabling them to plan, invest, recruit and trade with more confidence.”

Business, Economy & Jobs News

Chamber reacts to Chancellor discussions

David Peña, International Trade Manager at Chambers Wales South East, South West and Mid, said:

“The EU continues to be a vital market for Welsh exporters, accounting for a substantial proportion of our international trade. From agriculture and food production to advanced manufacturing and life sciences, Welsh businesses are well-positioned to capitalise on the opportunities presented by the bloc’s diverse markets. The recent discussions between Chancellor Rachel Reeves and European finance ministers, particularly around removing barriers for farm and food exports, mark a positive step forward in improving trade conditions and fostering growth.

“At Chambers Wales, we recognise the challenges businesses face when trading with the EU, particularly in light of changing regulatory landscapes. That is why we are actively collaborating with an EU counterpart to provide practical support and unlock new trading opportunities. This partnership is designed to address critical needs such as compliance, market access, and streamlined trade processes, helping businesses maximise their potential in European markets.

“In addition, we are launching a series of targeted webinars in January to help businesses stay ahead of regulatory changes, with a particular focus on key compliance topics such as the new General Product Safety Regulations (GPSR). These sessions will offer valuable insights and guidance, ensuring Welsh exporters are equipped to meet EU requirements and maintain their competitive edge.

“Our goal is to empower Welsh businesses to not only overcome existing barriers but also to thrive in the EU marketplace. With the right support, we believe Welsh exporters can continue to drive economic growth and build stronger international trade relationships.”

Accountancy & Accounts, FInance, Finance and Banking, Wales

ACCA Cymru/Wales on the draft Welsh budget

Lloyd Powell, head of ACCA Cymru/Wales, in response to the draft Welsh budget said:

“Following on from the extra spending on public services announced in the UK Budget in October, the draft Welsh Budget saw additional £1.5 billion of spending announced on public services, including the NHS and local authorities. Spending announcements in the draft Budget were firmly in line with the four priorities outlined by the First Minister earlier this year.

 

NHS

 

“Recognising the significant challenges the NHS in Wales faces, with an ageing population, increasing demand, persistent health inequalities and skills shortages, the 2025/26 draft Welsh Government budget saw a further £600 million allocated to Health and Social Care in Wales – amounting to over 50% of the total Government Budget. This needs to be accompanied by service reform and productivity gains. WG needs to redouble its efforts to address the fundamental challenges as outlined in ‘A Healthier Wales’ in 2022, including reducing waiting times, increased use of technology and investing in the workforce for the future.

 

Business support/skills

 

“Businesses in Wales continue to face challenges in 2025 and into 2026 which have adversely affected business confidence. These include higher employer National Insurance contributions and other rising costs such as the National Minimum Wage.

 

“The commitment to continue to support skills provision is welcome. The importance of supporting people into high-quality jobs, which are designed to drive economic growth and tackle poverty cannot be overstated. The additional investment of £6.5m resource funding to support the Flexible Skills programme, particularly in those sectors associated with decarbonisation, is a positive announcement.

 

“The announcement to extend non-domestic rates relief for businesses in the retail, leisure and hospitality sectors at the current 40% will help Welsh businesses in these sectors, although there will be concern at what support will be available beyond 2025/26.

 

“The announcement on accelerating planning decisions to grow the Welsh economy will be welcomed by many Welsh businesses looking to expand, as will announcements to improve the transport system in Wales. Businesses will hope that improvements in these areas will be delivered at pace to support the growth of the economy across all of Wales. .

 

Climate Change

 

“The additional funding to support climate change is welcomed as Wales continues to transition to low carbon industries and developing renewable sources of energy which also provide high skill jobs for Wales.

 

General

 

“The draft Budget only outlines spending plans for one year. Multi-year settlements for resource and capital at the conclusion of the UK Spending Review in 2025 will provide much needed certainty for the Welsh Government and its partners.

 

“The draft Budget needs the support of at least one opposition party, and it will be interesting to see how the discussion and debate on the draft budget develops in the new year prior to the Budget’s final approval in February 2025.

 

“Welsh Government needs to work with all partners, including businesses and the UK Government, to ensure the successful delivery of programmes of work that benefit the Welsh economy and society.”

Accountancy & Accounts, Finance and Banking

ACCA urges businesses to weigh up sustainability implications for AI investment

 

  • Accountants need to ensure long term sustainability objectives are not sacrificed for short term AI gains.
  • Leading global accountancy body ACCA says to embrace AI effectively requires education and a cultural mind shift.

 

Accountants have a key role in driving organisations towards using AI (artificial intelligence) to hit sustainability goals, especially in the area of data quality and data governance.

 

At the same time, they must make organisations aware of the environmental impact of AI investment in terms of greater emissions and water usage.

 

Leading global accountancy body ACCA has released the latest in its AI Monitor series, Unravelling AI’s role in sustainability, which says that to embrace AI effectively requires education and a cultural mind shift.

 

Embracing this sophisticated, emerging set of technologies could help in the fight to meet present needs without compromising future generations’ ability to meet their needs. AI solutions are increasingly seen as critical in helping organisations measure and report their environmental impact.

 

Alistair Brisbourne, head of technology research at ACCA, warns AI is a double-edged sword. He said: “It is clear AI holds tremendous potential, but without due consideration AI technologies can also threaten progress towards achieving sustainability goals.”

 

This is where accountants can add vital strategic value. As ACCA’s research Chief Value Officer – the important evolution of the CFO pointed out, as organisations increasingly integrate analysis and AI into their processes, it is the human analysis and validation of the outputs that create the insights which stimulate value generation.

 

Brisbourne said: “Organisations need to focus on getting people to think about AI as something that is learning from them, encouraging people to input and maintain data that will provide more value. At the heart of these challenges lies the fundamental issue of data quality and standardisation. Accountants need to lead in the establishment of good data practices to ensure benefits are realised.”

 

AI could be used to accelerate progress on achieving UN Sustainable Development Goals (SDGs). Innovative solutions are needed with only 17% of SDG targets on track for 2030 and another 35% showing signs of stagnation or regression.

 

In particular, technology could play a supporting role in sustainability reporting with AI overcoming one key challenge – converting financial data into meaningful environmental metrics. However, the challenge of data quality is not solved purely using AI.

 

Brisbourne added: “In terms of sustainability reporting, accountants have a critical role in making sense of transaction data to underpin and improve reporting.

 

“They need to ensure high-quality data input that AI systems can effectively interpret and learn over time, dealing with exceptions and verifying data. From an assurance angle, they can also support improved validation of estimates and monitoring of models running such exercises.”

 

The report also examines how AI brings its own sustainability challenges.

 

A single ChatGPT request has been estimated by the Electric Power Research Institute to require approximately ten times the amount of energy as a Google query. Goldman Sachs estimates that currently relatively stable data centre power usage is set to surge 160% by 2030 fuelled by AI. As a result, modern data centres are also increasing water usage – extensive cooling systems are required as more powerful chips generate more heat.

 

Brisbourne notes that organisations should focus on assessing the environmental impact of AI; ensure ethical deployment; and work on initiatives most relevant to stakeholders and business objectives.

 

Visit ACCA’s website for more information.

Accountancy & Accounts

ACCA Cymru/Wales on the King’s Speech

Lloyd Powell, head of ACCA Cymru/Wales, said:

 

“ACCA welcomes the King’s Speech and its positive focus on growth and the importance of stability in economic policy.

 

“However, with so many Bills for parliament to consider, it will be important for government to think small first, ensuring that legislative changes consider the implications for the smallest businesses. The Government should focus on getting the framework right so that businesses can plan and invest to generate growth.

 

“We welcome the commitment to establish a new Council of the Nations and Regions to renew opportunities for the Prime Minister, heads of devolved governments and mayors of combined authorities to collaborate and to bring economic opportunities to all parts of the UK.

 

“Although there are announcements that will affect Wales, such as the opportunities from Great British Energy and potential investments following pension reforms, we now face a further period of uncertainty as the new First Minister is selected, and we hope that this period of tumult will not result in Wales missing out on opportunities arising from announcements and initiatives from the new UK Government.”