The Importance of Accountancy and Accountancy Skills to the Economy

The Importance of the Accountancy Sector to the Government’s Growth Ambitions

Of the Government’s five missions it is already clear that their biggest priority, and biggest challenge, is economic growth. We have seen recent reductions in forecast GDP growth rates as businesses face increased employment costs, persistent inflation and a highly precarious international trade outlook. However, speaking at the recent Lifelong Education Institute annual conference Skills Minister Jacqui Smith stressed that “economic growth is the over-arching mission of the Government”.

The accountancy sector is critical to that growth mission.

Economic growth will help drive much-needed increases in GDP which will support employment and means higher tax payments which funds the NHS, defence and other public services. As a country, we therefore need to be investing in being better than our international competitors and ensuring that the resources we have are used to their full potential.

This fundamentally requires strong financial and commercial acumen across all sectors, and at all levels of decision-making and leadership. There is no better grounding to offer this than the training and development that comes with becoming a qualified accountant.

As the government focuses on its mission of driving economic growth through improving productivity, continued training of skilled accountants is essential to achieving those goals. The accountancy sector underpins financial stability by providing sound financial management and governance, and by helping businesses to navigate complex regulatory environments. This will be critical in fostering confidence amongst global investors and consumers during this period of rising macroeconomic uncertainty.

Many company failures in the last decade can be put down to poor financial and commercial management so we need to ensure that doesn’t happen in the future.

The accountancy sector also plays a crucial role in supporting the broader economy, providing essential services in areas such as corporate reporting, auditing, tax, budgeting and financial management. They are fundamental to the sustainable operations of businesses across all industries and ensure that companies comply with accounting regulations, manage financial risks and make investment decisions based on sound financial analysis.

Accountants work in every sector in every part of the country, including thousands of SMEs as well as listed companies and the public sector. Whether they are advising clients of accountancy firms, helping make strategic decisions as part of business finance teams or ensuring value for money in the public sector qualified accountants work in cities, towns and rural areas. The ongoing development of skilled finance professionals is essential to local, sectoral and national economic growth and competitiveness.

Accountancy is the sector that supports every other sector.

Supporting the UK Industrial Strategy

High-level accountancy skills, such as audit and tax, are integral to two of the government’s eight key growth sectors: financial services and professional & business services. They are also important to organisational success and resilience in other key growth sectors such as life sciences, advanced manufacturing and clean energy industries. In a recent survey, 79% of employers in the sector reported direct or indirect involvement with these government-priority sectors, including Digital, House Building & Construction and Green initiatives.

Furthermore, accountancy was highlighted as an example of an area of emerging strength that the government wants to capitalise on to expand the UK’s global market.

Accountants are Both Digital and Green

The Government is also placing a premium on the pursuit of digital and green skills across all sectors of the economy, and these are areas which qualified accountants have a huge role to play in.

The accountancy sector is a key driver for the adoption of digital technologies, data analytics and artificial intelligence. Over the last five years, the technological transformation of the role, the impact and the skills set of accountants has been profound. This shows no sign of slowing down.

Former chancellor Jeremy Hunt’s recent comments advising against careers in accountancy for fear of the impact of AI could not be further from the truth. AI will not reduce the need for skilled accountants, it will empower them. It makes the human aspect of the profession even more important, and the development of broader professional skills more needed.

Accountants will also be at the forefront of pursuing net-zero and climate change targets. On the regulatory side they will be the ones ensuring accurate adoption of new green requirements for reporting, disclosing and assuring sustainability measures in company annual reports alongside traditional financial information. Perhaps more importantly, it is accountants who will lead business decision-making to ensure that climate sustainability can be matched with financial sustainability.

Accountants will be best placed to focus on the commercial and business implications of robust sustainability policies, winning and keeping customers, recruiting and retaining talent, raising bank finance, attracting investment, and getting insurance cover. Sustainability will rapidly become a business-critical issue, and accountants will take the lead.   

But none of this is possible without talent.

Accountancy Skills Gaps

The accountancy sector is currently facing critical skills gaps with areas such as audit, tax, and bookkeeping being regularly identified as having acute shortages of talent.

90% of employers recently surveyed said there is currently a lack of experienced, qualified accountants in the UK, highlighting the need to invest in the development of skilled finance professionals. This finding is supported by last September’s Skills England report, which highlighted financial and accounting technicians as being in critical demand.

The shortage of qualified accountants is impacting business growth, productivity, and UK national competitiveness, as firms offshore work to India and South Africa to make up for short-falls in domestic talent. This will negatively impact employment opportunities, GDP and tax revenues and weaken the power of our important professional services sector over time.

Creating Job Opportunities and Driving Social Mobility

In addition to the growth mission, the Government is also determined to break down barriers to opportunity. As well as the role it plays supporting organisations and the economy, the accountancy profession also plays a key role in supporting social mobility and providing ambitious young people with access to high-quality, well-paid careers regardless of their background.

Greater diversity and equality in the accountancy sector have been particularly improved over the last decade by the widespread adoption by employers of trainee accountants of school leaver programmes and apprenticeships.

The Power of Apprenticeships in Supporting Talent for the Accountancy Sector

The glue that helps bond the potential of the accountancy sector to the missions of both economic growth and social mobility is apprenticeships.

Since 2017, apprenticeships have transformed the way that professional accountants are recruited and developed.

Apprenticeships and the pathways they provide through a variety of globally respected accountancy qualifications encourage higher retention rates and loyalty. Apprentices demonstrate stronger interpersonal skills and greater readiness for progression to senior leadership positions. This significantly benefits organisational performance and growth.

And it’s not just for accountancy firms. Public sector organisations, including NHS trusts, heavily rely on apprenticeship funding to train highly skilled accountants necessary to manage complex financial challenges. On top of the way the accountancy sector drives growth and productivity in the private sector, this underscores the critical role it plays in public sector effectiveness and value for money​.

We call on the UK government to recognise the importance of the accountancy sector to the Industrial Strategy and its economic growth ambitions. They must also understand the profession’s role in driving social mobility and breaking down barriers to opportunity. Policymakers, employers and educators have a responsibility to work together to bridge national finance skills gaps and protect access to high-quality training routes in the accountancy sector, like apprenticeships. Prioritising the development of highly skilled professionals, like accountants, must be central to the UK’s growth strategy in order to boost productivity, strengthen public services, and unlock opportunities nationally and globally.

By Gareth John, Director at accountancy training provider First Intuition