Chancellor George Osborne has committed to create more apprenticeships and created a Single Local Growth Fund, first outlined by Lord Heseltine.
The government’s new spending review has been compiled base on three principles: reform, growth and fairness.
In his speech to the House of Commons, chancellor George Osborne announced that government spending for 2015-16 will be £745 billion, with cuts of £11.5 billion.
New initiatives aimed at business include a pledge to put more money into apprenticeships, with money saved through cost cutting at the Department for Business.
Osborne said, ‘Within this reduced budget we can put more money into apprenticeships, and continue with the dramatic increase in support we’ve provide to exporters through UKTI.’
In March, David Cameron’s coalition announced plans to ‘redefine’ apprenticeships to promote their usage in the UK and make them more successful.
As part of its plans, the government will be raising standards and allowing employers to have more of a say in how apprenticeships are constructed.
The government is also planning to enact some of the recommendations made by Lord Heseltine as part of his report on growth in the UK.
‘We’re also embarking on major reforms to the way we spend money locally through the creation of the Single Local Growth Fund that Lord Heseltine proposed,’ Osborne explained to the House.
‘This will be £2 billion a year – that’s at least £10 billion over the next Parliament – that Local Enterprise Partnerships can bid for and the details will be set out tomorrow.’
Commenting on the announcement, Simon Hill, managing director of Wazoku, says that the Spending Review offered only qualified encouragement for the business community to help kick-start the economy.
Hill adds, ‘George Osborne said today that government spending does not produce sustainable growth, enterprise does.
‘This is true but enterprise needs help and encouragement and whilst there were positive announcements around transport and apprenticeships I saw few signs that an overall vision for UK enterprise in today’s speech.’
Hill points out that the £10 billion Local Enterprise funding over the next Parliament is ‘significantly’ lower than the recommendations made by Lord Heseltine’s No Stone Unturned report.
Also contained within Osborne’s speech were plans to make a ‘huge investment’ in science.
Osborne said, ‘Scientific discovery is first and foremost an expression of the relentless human search to know more about the world but it is also an enormous strength for a modern economy. From synthetic biology to graphene – Britain is very good at it.’
The government is now committing: to maintain the resource budget for science at £4.6 billion; increasing the capital budget for science in real terms to £1.1 billion; and maintaining that real increase till the end of the decade.
Diane Brennan, managing partner at accountants Jackson Stephen, comments, ‘Business owners aren’t easily falling for Osborne’s flattering description of them as “geniuses” but instead calling for him to cut taxes, cut red tape and put more pressure on the banks to extend lending to successful entrepreneurs.
‘If we’re going to invent and pioneer new products and services we need more investment in science and digital infrastructure which has been indicated but businesses and organisations must lobby hard for extra resource.’