This week’s blogs: the great divide

This week's blogs: the great divide

This week, bloggers look at the widening gap between public and private sector pensions and the increasing numbers of qualified FDs in FTSE-100 companies

Vince Cable reported to us earlier this month that debates around the finance
bill each year are very difficult to follow.

This lack of accountability is creating an unbridgeable divide between the
public and private sectors. I am beginning to detect a real resentment that only
radical action by policymakers can resolve.

Take pensions. There are four basic principles of good pensions housekeeping:
affordability, sustainability, transparency and accountability. Demographics and
poor stock market performance have tested these principles thoroughly in the
private sector, resulting in the collapse of final salary schemes. But, in the
public sector, much of the provision is unfunded.

So what is the solution? I am persuaded by the CBI’s call for an independent
commission to look at how we address the issue of public sector pension
provision for the long term.

When one third of council tax payments goes towards paying the pensions of
local government officials it is time to get a grip on this issue.

Above all, we need much greater transparency of financial information and a
simpler way of measuring and reporting public sector liabilities. Only then will
we be able to address this issue in a way which is fair and proportionate to
employees across our economy.

Michael Izza is chief executive of the ICAEW
Ion.icaew/moorgateplace

I was pleased to see that in these troubled times the number of FTSE-100 FDs
who hold an accountancy qualification is now higher than it was a decade ago ­
according to a new survey in the latest issue of our sister publication
Financial Director.

The ICAEW has strengthened its grip, accounting for 55 of the 80 FDs with an
accountancy qualification, compared with 51 of 79 in 1998.

Much, much more interesting was the significant change in the number of CIMAs
in the boardrooms of this elite group of companies. There were 15 in 1998 and
after a decade of expansion in membership and growth in influence, surely that
was a number that would have climbed since?

Not a bit of it. Today, there are only eight.

Some, like Tesco’s Andy Higginson, have moved into very senior operational
roles. But that alone doesn’t explain such a sharp and unexpected decline.

Damian Wild is editor-in-chief and publisher of
Accountancy Age

Accountancymatters.accountancyage.com

The UK is facing a budget crisis. I won’t dispute it. But a crisis is a time
to review your assumptions. The assumptions that underpinned our budget must be
appraised now. The follies must go. Amongst them might be the excess of the
finance industry. The belief that money can be made out of money has always been
wrong: it cannot be. I do not dispute that ensuring capital is available for
projects that need it is an essential and worthwhile process. But that is
something quite different from speculation. And the liquidity required for the
former is vastly, vastly less than the liquidity required for the latter.

Richard Murphy is a founder of
the Tax Justice Network and director of Tax Research LLP
taxresearch.org.uk/Blog

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource