The UK looks set to face a challenging winter. With the number of COVID-19 cases rising and large parts of the country already experiencing local lockdowns, the government issued further restrictions for England on 22 September.
Pubs, bars and restaurants have been told that they must operate table service only and close at 10pm. Furthermore, office workers have been asked to work at home if they can – despite the government previously suggesting it was safe for them to return to their workplaces.
These latest restrictions are in addition to the ‘rule of six’, which prohibits social gatherings of more than six people. The governments of Scotland, Wales and Northern Ireland have also tightened their rules in response to the pandemic.
The continuing threat of COVID-19 – combined with Brexit uncertainty – is presenting numerous challenges for businesses. In a recent video conference, members of the UK CFO Forum of the Association of International Certified Professional Accountants shared their main concerns. These were:
- Mixed messages around home working
Businesses had begun the process of returning staff to the office. So, the government’s announcement around home working has led to confusion and unsettled employees. Some organisations are in a difficult position as a result. The CFO for a charity said her organisation needs to perform face-to-face work with clients to secure funding, but it is hard to persuade employees to come into the office when the government has said they should stay at home.
- Revenues are at risk
Organisations that rely on government funding are starting to experience budget cuts. The CFO for a higher education body said that international scholarships were under threat, which could potentially impact how many foreign students come to study in the UK. Meanwhile, the restrictions imposed on the hospitality sector could be a blow to consumer confidence. The CFO for a brewery said his organisation’s sales could be affected as a result.
- Innovation is being compromised
Within many businesses, innovation happens as a result of collaboration. Hence the CFO for an engineering company expressed concern that if organisations cannot bring people together on a face-to-face basis, innovation might be compromised. This, in turn, could impact on organisations’ ability to claim R&D tax credits.
- Keeping stakeholders happy
To successfully navigate these tough economic conditions, organisations need to communicate with all their stakeholders, including customers, employees, suppliers and investors. The CFO for a retail bank explained that his organisation faced the additional challenge of managing the expectations of regulators. Communication is particularly important when organisations are operating on a remote basis.
- Employment challenges for new graduates
Today’s graduates face an extremely challenging recruitment market. Nevertheless, they will be expected to pay the future taxes that will fund the country’s recovery from the current crisis. They need support to secure the careers that will enable them to do that. For example, they could have access to online training that helps them to develop skills while they look for work opportunities.
- Targeted support for sectors
COVID-19 is not affecting every sector equally. For example, sectors such as events, hospitality, retail and sport are more heavily affected than information-based sectors such as technology. For that reason, the government needs to be tactical about the industries and sectors it supports through initiatives such as the furlough scheme.
Ongoing uncertainty is very difficult for UK businesses to manage. Nevertheless, they have proved their resilience over the past few months by overseeing a mass shift to remote working and continuing to operate amid the crisis. Finance teams have supported them by managing costs, implementing tighter credit control procedures, accessing government support schemes, and undertaking scenario planning. Now the focus – of both businesses and the government – needs to be on powering the UK’s economic recovery over the medium to long term.