ACCA UK comments on King’s Speech

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 the 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.

On audit and corporate governance reform Mike Suffield, Director of ACCA Policy and Insights, said: ’Audit reform has been severely overdue in the UK, yet repeated delays have sidelined it, despite the importance of it in promoting the UK as a great place to do business. ACCA has long called for this implementation, so to see it included in the King’s Speech as one of the first points of the speech is a huge step forward.

‘Legislation will place the planned new regulator, the Audit, Reporting and Governance Authority (ARGA), on a statutory footing and will set out clear expectations and accountability for Boards, management and auditors.

‘The shift of the FRC to ARGA as a clear independent watchdog will strengthen the oversight of audit quality so that audit firms can be held properly to account, introducing changes that have been needed since the collapse of Carillion in 2018.’

On HMRC investment and reform Glenn Collins, Head of Technical and Strategic Engagement, ACCA said: 'HMRC is a cornerstone of the UK’s economic and business systems, and as ACCA has highlighted repeatedly over the past few years, it is a system that has been badly let down by repeated cuts, lack of investment and a general disregard for the role it plays.

‘We were disappointed not to see a reference to measures to improve the service in the King’s Speech. We hope to see restored trust between HMRC, taxpayers and agents, in the near future, by implementing a programme of improvements, including additional resource and training for staff to address serious issues with unacceptably low service standards at a foundational level.

‘ACCA will continue to challenge and support HMRC to see how the investment benefits businesses and the exchequer over the next 12 months, and will remain in close communication with HMRC to pass on feedback from members and provide expert insight as needed.

‘Dedicated reform and ground-up change in HMRC would no doubt be music to the ears of accountants up and down the country who have struggled with a system not fit for purpose for too long.

‘HMRC should seek to enable professionally regulated agents to provide services which can save time and resource for HMRC, for example, restricting the R&D tax relief claims to professional agents.’

On AI legislation introduction Alistair Brisbourne, Head of Technology Research, ACCA said: ’The advancement of AI is something ACCA has been a strong advocate for in recent years, and our members have fed back positive responses to the use and adoption of AI.

‘It is positive to see that the government is committed to establishing appropriate legislation regarding the most powerful artificial intelligence models. We are confident this will be a step towards mitigating the way in which AI can be used for unethical, immoral or illegal activities. AI is a tool which can open a huge amount of productive potential in accountancy, and effective deployment of the tool relies on proper legality around its use, as well as demystifying the role in which it will play in work.

‘Recognising the unpredictable nature of AI’s development and potential impact, we recommend a principles-based regulatory approach. This can strike a balance between innovation and protecting consumers while also providing the necessary clarity for businesses to plan investments and ensure compliance.

‘A focus on transparency, responsible adoption, and AI literacy is central to the successful long-term integration of AI in the business world. As such we would also welcome due consideration to training incentives.

‘We urge the government to consider wider implications of AI and to consult with businesses, adopting a multi-stakeholder perspective to address their concerns and shape a bill that is best fit for all at this current time.

On new powers for the Office of Budget Responsibility, Jonathan Ashworth, Chief Economist at ACCA said: ’The government’s decision to strengthen the powers of the OBR is something that ACCA welcomes with great enthusiasm. As with all entities, proper financial forecasts play a significant role in increasing transparency and ensuring stability. The changes will enhance the government’s fiscal credibility, as well as that of the broader UK policy making framework. The move will be welcomed by business and investors – both domestic and foreign.’

On employment, skills and training Gemma Gathercole, Strategic Engagement Lead for England, ACCA said: ‘Demand for professional finance skills is growing, with many employers unable to recruit the talent they need. Across the wider economy, spending on training has declined amongst a complex skills landscape where employers struggle to navigate training opportunities and funding.

‘ACCA welcomes the commitment to review the Apprenticeship Levy, but is keen to understand the detail of the proposed changes. The government needs to ensure that the levy is fit for purpose to help businesses close the skills gap and get access to the right talent.

‘ACCA is pleased that the focus on skills has been raised at this King’s Speech, including particularly the establishment of Skills England and the necessary partnership with employers. To further support businesses to invest in skills, we have recently called for the adoption of the Skills Tax Credit Pilot, which would allow businesses to offset £5,000 of training spend. This would ease the burden on businesses and incentivise training, creating a workforce for the future who are adaptable and skilled.’

On local authority power devolution Jessica Bingham, Regional Lead, Policy and Insights, ACCA said: ’The devolution to give more local authorities power away from Westminster is a reflection of recent changes in the UK, such as with increased powers for regional Mayors. It recognises the importance of local people doing local work, putting budgets and resources to use in the places where they are most needed.

‘However, ACCA urges caution when devolving budgets to local authorities who are not set up with proper audit and corporate governance processes. It is important to ensure that devolution is an effective handing-over of power, equipping all parties with the skills and resources they need to make it a success.

‘A transition to local authority powers will empower regions and has the potential to divert more money and resource to where it’s needed most, but there needs to be a firm hand guiding the tiller of finances and a steady, measured approach to change.’

Lloyd Powell, Head of ACCA Cymru/Wales, said: '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. 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.'