With a General Election to call Jeremy Hunt’s budget has been tagged as an attempt to appeal to the voters above all else. Tania Bowers, Global Public Policy Director at APSCo highlighted this saying: “The Chancellor demonstrated clear intentions to win over voters with tax cuts to National Insurance and proof that his long-term growth and investment policies are bearing fruit.” She said the approach remains consistent from the Autumn Statement with continued monetary boosts to specific sectors, such as renewables and life sciences and construction projects including Barking and Canary Wharf. He also suggested two thirds of new jobs since 2019 are outside London, although this is not entirely borne out by APSCo’s sector research.
“For the staffing sector, there were numerous elements missing that we had expected to see and very little on the workforce or skills,” added Bowers. “The Chancellor is continuing to rely on previously launched programmes to get the 10 million adults of working age back into work plus the cuts to employee National Insurance. We think this will offer greater encouragement to the lower paid and lower skilled to enter work. In the skilled sectors, continued shortages will dampen the effect with APSCo research showing applications per job across the Life Sciences sector down 54 per cent month-on-month and 40 per cent year-on-year in February 2024. In the IT sector, which is key to the success of the newly announced NHS Public Sector Productivity Plan, applications per job dropped 46 per cent between January and February this year (jobs only fell by 7 per cent in this time). They are also down 27 per cent from the beginning of 2023.
That said, APSCo welcomed the launch of the NHS Public Sector Productivity Plan together with the £3.4 billion to be invested in IT systems modernisation. “However, we hope there are the specialists in technology and AI in the labour market to deliver,” she said. “We fear an overreliance on consultancies, which are generally far more expensive overall than the use of skilled flexible contractors through recruitment businesses.”
For the Recruitment and Employment Confederation (REC), Chief Executive Neil Carberry was positive about the Chancellor’s intention to stimulate investment and drive per person growth.
“There were plenty of initiatives in the Budget today that business will welcome,” he said. “From AI skills support in professional services, to growth support on finance for small businesses and a patchwork of sectoral measures. There were many sensible steps. But taken together – they didn’t add up to the industrial and workforce strategy we really need.
“Cutting employee National Insurance is the right call when addressing personal taxation, because it is targeted on workers and particularly helps the low paid,” he added. “REC members agree with the Chancellor that taxes on labour are too high – but would have welcomed the acknowledgement that this is also true for businesses, many of whom are really struggling with a cauldron of rising costs. From a minimum wage that has risen 20 per cent in two years to inflation and higher business taxes – there needed to be more to really get investment going.”
On temporary staffing and the NHS, Neil added: “Healthcare agencies keep the NHS open. But on-framework provision has been made unsustainable over the past few years by poor management and unrealistic cost assumptions. You can’t freeze wages for temporary nurses through a pandemic and inflation spike – but that is what this government tried to do, super-charging higher cost off-framework provision and hidden high-cost Bank provision.
“Hopefully, today is the start of a discussion where agencies can finally be allowed to help the NHS reduce cost and improve the standards of care – but that requires a true partnership,” he said. “We are ready to help. The deadline the government has set for ending off-framework this summer is unrealistic and would likely damage the quality of care and increase waiting lists.”
