CMI calls for training tax credits to tackle recession
The Chartered Management Institute (CMI) is calling on the UK government to tackle the recession by offering tax relief to businesses who provide training opportunities for staff.

www.consultant-news.com  15.01.2009

The CMI’s call is based on data, released today, showing employers in the consultancy sector want greater support from Government, with many looking for opportunities to develop skills amongst their existing employees.

Ruth Spellman, the Institute’s chief executive, says: ‘We are calling for tax breaks for businesses investing in their staff and are developing our proposals with key partners. Put simply, employers should be encouraged to develop staff because a depleted organisation with fewer skills to call on is less likely to survive the recession. It isn’t a question of baling out business or massaging unemployment figures, but creating a strategy for survival that reduces redundancy rates over the long-term.”

Spellman’s comments come in the wake of a poll conducted by the CMI to ask how business leaders across the consultancy sector plan to manage the economic downturn. Key findings suggest that employers in the sector are heavily reliant on Government to make bold decisions:

- 63 per cent in the consultancy sector want even more financial support from Government to help develop employee skills

- 57 per cent say flexible working regulations must be applied across the whole workforce

- 66 per cent in consultancy have called for a reduction in business taxes

Offering Gordon Brown some good news, the results show that only 6 per cent in the sector believe ‘Government can do little to affect the downturn’. Many respondents also suggest that Downing Street should push through measures aimed at motivating staff to perform. For example, just 10 per cent in the consultancy sector think that the proposed right for employees to request time of for training should be held back.

Spellman adds: “Developing skills and motivating staff to perform comes at a cost, but a recession is about making sensible cut-backs, not wholesale budget reductions that will leave organisations floundering in the future. Government and employers need to think about how they will manage immediately and when we eventually turn a corner, meaning there is a case for guidance through better regulation. After all, if they think the cost of competence is expensive, they should consider the cost of incompetence.”

The survey also shows that employers accept some responsibility for tackling the recession, with many respondents focusing on reducing pay outs so that funds are available to ease cash-flow:

- 26 per cent in the sector are considering reducing dividends for stakeholders and 26 per cent are also looking at implementing ‘pay freezes’ over the next 12 months

- 16 per cent in consultancy will restructure their debts and 27 per cent are considering mergers as a route to survival

- encouragingly, 46 per cent in the sector have already implemented product innovation programmes and 33 per cent claim they have diversified into new markets.

Responding to the findings of the survey, the Chartered Management Institute has launched a micro-site with free-to-download resources for individuals and employers. Online at www.managers.org.uk/however, the tools and advice available are designed to tackle the issues created by the recession.