Small firm confidence plummets as Government cuts support

January 27, 2023

A new accountancy survey has revealed an underlying pessimism among the nation’s small and medium-sized businesses, as a third said they feel less confident about their growth prospects. 

A survey from the Association of Chartered Certified Accountants (ACCA) and the Corporate Finance Network (CFN) also found that the number of SMEs who planned on growing fell from 38% last summer to just 17% now

It found that the biggest issues for these companies were ongoing inflation, concerns about recession, and the ongoing impact of debts related to the pandemic

Unsurprisingly, sky-high energy prices were the biggest single problem for small and medium-sized company bosses, with energy costs expected to increase again when government support is pared back in April. 

The survey revealed that the vast majority of small and medium-sized firms weren’t planning to recruit new staff in 2023. London-based firms are most likely to recruit, with 10% saying they were looking to take on new staff this year.

This compared to 37% of small and medium-sized firms who said they were looking to recruit in March 2022. 

The survey also suggests that economic conditions are taking a serious toll on the mental health of company bosses, with around two-thirds reporting higher levels of stress and anxiety. 

Small firms said they hoped the government’s upcoming Spring Budget would address some of the problems facing businesses, with around 80% saying policymakers should prioritise small and medium-sized businesses with future support. 

Glenn Collins, Head of Technical and Strategic Engagement at ACCA UK said:

“If the government wants to achieve their ambitions for economic growth, then it needs to take action and put in place a robust plan to address business pessimism. 

With an uninspiring Autumn Statement and subsequent cutting back of measures such as the energy support bill, SMEs are struggling and mental health is plummeting as a result. Businesses are in dire need of clarity for 2023 as they remain at a loss, unable to efficiently plan and organise their finances. This must be addressed in the Spring Budget.”

Miles Grady, Director of said:

“After a tricky few years, business optimism nose dived to one of the lowest points in recent memory following the Autumn Statement last year. 

When conditions are tough, it is crucial that managers and owners can work closely with an accountant that they trust. At the moment, we’re doing everything we can to help our small and medium-sized customers survive and thrive in 2023.” 

For more information about accountancy software and support for small and medium-sized businesses, get in touch here or call: 0808 281 0303.