Today the Chancellor delivered his first and last Spring Budget (from now on budgets will take place in Autumn), reading from a much slimmer red book in comparison to recent years. Although there were fewer announcements, there were still some important announcements for recruiters to take on board.
The self-employed will be remembered as the group hardest hit by this budget. The Chancellor wants to redress the balance between employees and the self-employed, announcing his intention to:
Disappointingly - but unsurprisingly - IR35 changes in the public sector were also confirmed.
The REC has long been calling for clarity and a level playing field in taxation matters, but we think it would be more sensible to take a holistic approach to employment status and tax. We would prefer to see tax either incorporated into the scope of Matthew Taylor’s Review, or deferred until his review and the Office for Tax Simplification have reported on the findings of the cross-departmental working group into employment status.
Many of the employment practices seen today are a direct product of our existing tax system. Therefore, we call for a broader, cross-departmental review which better aligns these different work streams.
Others points to note:
Skills and productivity
There was some good news on the skills front, though few surprises as the new funding commitments had been trailed in advance. The Chancellor committed to supporting:
These measures will be welcomed by employers facing acute skills shortages, as highlighted in today's Report on Jobs.
We look forward to working with the government to develop these initiatives. Recruiters have significant experience in supporting people from all backgrounds into jobs. But it will take time for Britain to reap the rewards of a new approach to skills. Britain needs continued access to people and skills from abroad now to ensure businesses can continue to grow.
The UK’s lagging productivity levels were again in focus, though there were few new announcements. The Chancellor reiterated commitments made in the Autumn Statement to allocate funds for 5G, transport infrastructure, artificial intelligence, the next generation of electric vehicles, as well as funding for PHD places through the National Productivity Investment Fund.
This is good news for our members in the technology, construction, drivers, engineering and life sciences sectors.
Health and social care
Health and social care members will be pleased to see that action is being taken to tackle the crisis in the NHS through immediate funding increases. A green paper on the long-term sustainability of the NHS is due soon.
There will be £2billion in additional funding for social care to councils in England and a further £425million to improve local NHS and A&E services.
Public sector resourcing
The Chancellor didn’t give much air time to this, but within the Spring Budget documents is a reaffirmed commitment to find £3.5 billion of savings. The government has asked Sir Michael Barber to lead a review which will consider how to embed a culture of efficiency across government departments as they cut costs. We will track developments as part of our work on procurement.
You can read the budget statement in full here. We will continue to keep members up-to-date as details emerge via consultations and draft regulations.