ACCA: 79% of SMEs believe energy support package isn’t sufficient
A new survey from ACCA UK (the Association of Chartered Certified Accountants) and The Corporate Finance Network (The CFN) has revealed that a staggering 79% of SMEs believe the current energy support package for businesses is insufficient.
The SME Tracker contextualises the ongoing political and economic uncertainty and reveals the top issues SMEs want to see incorporated in the government’s new autumn statement on November 17th.
The survey, which polls accountancy professionals on the financial outlook of their SMEs clients unsurprisingly found, the top issue SMEs want addressed in the new autumn statement are measures to tackle inflation (71%). Encouragingly, Mr Sunak addressed this problem in his first Prime Minister’s speech.
A further 97% of businesses feel that the energy support did not account for specific energy intensive sectors, with a number citing cutting back on trading hours to address rising energy costs.
Over half of SMEs (55%) also are also calling for targeted energy support for both organisations and individuals, which is yet to be properly detailed. Despite the PM acknowledging that ‘difficult decisions’ need to be made, the impact of these decisions remains unclear. Greater clarity on these decisions is needed, particularly when it comes to energy costs.
Against the backdrop of high inflation, firms are struggling to secure working capital due to a number of factors including a rise in interest rates, with 57% reporting borrowing to manage cash flow has been more difficult in the last quarter than over the previous 12 months. Almost half (47%) say that supplier credit is harder to access, while over a quarter (27%) report accessing support from HMRC’s Time to Pay scheme is more difficult.
ACCA UK and The CFN warn that as political uncertainty continues, more detailed and targeted support from the new government will be needed to help firms weather the storm.
Susan Love, strategic engagement lead for ACCA Scotland, said: “In the face of so much turmoil, it can be tempting to take a ‘wait and see’ approach. However it’s more urgent than ever for the new government to address the issues, such as providing certainty on energy support schemes from April, tackling inflation and improving access to finance for SMEs. With no end to volatility in sight, business owners and accountants need to work even closer together to forecast effectively without a clear plan set by the government at this current time.”
Kirsty McGregor, founder of The Corporate Finance Network, added: “This is a worrying time for all SMEs, as profits will inevitably take a dip with a softening in consumer spending. Only resilient businesses with strong working capital and cash reserves will survive, and following the pandemic, cash resources are already stretched. The lending markets are understandably taking a more risk-averse approach to companies with weaker balance sheets, so business owners should take action early and work with advisers who can assist them to strengthen their cash flow situation to ride out this storm.”