Why the UK Budget System Isn’t Working — And What Needs to Change

Rothstone Accountants Insight – December 2025

The recent UK Budget highlighted a familiar problem: our national budgeting system is no longer fit for purpose. Instead of clear planning, we saw leaks, confusion, last-minute changes and a lack of meaningful economic direction.

From an accounting and financial management perspective, this raises a simple question:

How can any country achieve long-term stability when its main economic plan is delivered through political theatre rather than structured financial planning?

At Rothstone Accountants, we believe the issue is bigger than one Chancellor. It’s a structural problem — and fixing it requires a more transparent, data-driven and accountable approach.

1. Budgeting Should Be Strategic — Not Performative

• A national budget should set out:
• How the government plans to drive growth
• How inflation will be managed
• How public spending will be controlled
• How fair and effective taxation will work
• How employment and business investment will be supported
• How economic decisions affect the environment and long-term sustainability

Yet what we often get instead is a single-day announcement designed for headlines, not for long-term stability.

For any organisation — including government — this approach would be unacceptable. You wouldn’t run a business on guesswork and last-minute U-turns. Neither should a country.

2. A Modern Budget Needs Real Consultation

Good financial management involves listening to stakeholders, analysing data, and planning with the people affected.

• A reformed budget process should include:
• Open consultations
• Transparent use of data
• Input from economists, industry professionals, small businesses, and communities
• Clear communication of objectives

This isn’t about political point-scoring. It’s about bringing the public into the decision-making process, the same way good companies engage with clients, staff, and regulators.

When people feel involved, trust increases — and economic decisions are easier to implement.

3. The UK Tax System Needs Structural Repair

Our tax system has become overly complicated and inconsistent. For example:

Small companies sometimes face lower corporation tax rates than basic-rate earners

Capital gains tax is still significantly below income tax

Billions in corporation tax from small businesses goes uncollected due to system gaps

• This isn’t just inefficient — it’s unfair.
• We need:
• Proper tax design
• Analysis of how taxes interact and create unintended consequences
• Measures to reduce avoidance and late payments
• A balance between simplicity and fairness

A good tax system should raise revenue without distorting behaviour or encouraging loopholes.

4. Budgets Need Proper Accounting — Not Just Forecasting

Every accountant knows that forecasts are meaningless without comparing them to actual results.

Yet year after year, the UK Budget focuses on projections without presenting clear comparisons with previous forecasts.

• A reliable system would:
• Publish historical forecast accuracy
• Explain why differences occurred
• Review spending effectiveness
• Provide genuine performance insight

This is standard practice in accounting — and it should be standard for government too.

Without proper accounting, confidence in economic management naturally declines.

5. Stability, Transparency and Sustainability Must Be Central

• A reformed budget process should:
• Remove the “once-a-year drama”
• Prioritise evidence over politics
• Focus on real economic outcomes
• Incorporate environmental and long-term sustainability
• Give businesses clarity so they can plan, invest and hire

Right now, rapid policy changes and unclear communication affect businesses, families, and public services. Long-term stability is essential for growth — and it’s achievable if we treat economic planning as a strategic process, not a performance.

Conclusion: The UK Needs a Budget System Built for the Future

The way budgets are created today does not serve the public, businesses, or the wider economy. A modern system should be:

• Open
• Transparent
• Evidence-based
• Accountable
• Designed with participation
• Focused on real results

At Rothstone Accountants, we work with businesses every day to provide structure, forecasting, and clarity. Applying the same principles to national budgeting would create a stronger, fairer and more stable UK economy.

If you want deeper analysis on how the Budget affects your business, tax planning or future strategy, feel free to reach out to the Rothstone team — we’re here to help.