Autumn Budget: Give employers confidence to invest

Ahead of the Chancellor’s Autumn Budget next month, the Recruitment and Employment Confederation (REC) is seeking urgent action to strengthen the UK labour market and unlock economic growth.

A rise in staff availability, falling vacancies, weak pay growth and declining confidence are the headlines in today’s jobs market.

Meanwhile, reports circulate of manufacturers delaying investment, hospitality turning away business due to a lack of staff and NHS Trusts unable to fill critical roles.

Hiring, wages and investment risk stagnation without decisive fiscal and policy action by the Chancellor. Only with a strong and sustainable labour market will the UK deliver the growth our economy so desperately needs.

Business was given a Budget of burdens last year. This time, employers need a Budget for business. This is achieved by providing clarity and making practical changes to the implementation of the Employment Rights Bill. Freezing Employers’ National Insurance and restoring the threshold when possible. Skills Levy reform needs speeding up so temporary workers can access training and encourage more private investment. Modernising public sector hiring should mean supporting flexible work that maintains quality services and delivers value for money. Resisting poorly evidenced attacks on agency workers in health and education when these workers would be lost to public service otherwise, is vital. These changes are fundamental to embedding a long-term workforce strategy to support growth.

REC’s recommendations:

• Relief for employers: Freeze National Insurance and commit to restoring the threshold, reduce regulatory burdens and inject practicality and deliverability into the complexity and cost of the Employment Rights Bill.
• Skills and training reform: Increase levy flexibility, expand short-course funding, and boost reskilling pathways.
• Support workforce participation: Accelerate childcare expansion, healthcare investment, and transport infrastructure to broaden access to work.
• Public sector modernisation: Reform hiring frameworks, remove rigid pay caps and address NHS staffing bottlenecks. Accept that people want to work in different ways, despite what out-of-touch union leaders say.
• Strategic investment alignment: Embed workforce planning in industrial and infrastructure projects to ensure labour market needs are met.
• Public-Private Partnerships: Scale collaboration in construction, green energy, health and other critical sectors to maximise impact.

REC Chief Executive Neil Carberry said:

“Businesses are the heart of driving investment and growth. They need a Budget that backs them, not more burdens that slow them down, and with it the path to recovery in our economy and the public finances. This Autumn Budget is a chance to restore confidence, unlock investment and deliver opportunities through a focus on making the most of the opportunities we have.

“There is clear potential in the economy that is not being realised. Consumers are holding cash and firms are optimistic they can deliver, yet this is not translating into hiring or investment while they wait out what government does next. The Autumn Budget can turn confidence into action with bold action that focuses on unlocking potential through delivering on skills reform, supporting business investment and reforming the approach to the Employment Rights Bill, which will slow down growth.

“The government also needs to be data rather than ideology led when it comes to the public sector workforce. The Department of Health and Social Care needs to work with healthcare staffing agencies to reform an approach which is now increasing risks and costs to trusts. Blaming agencies has run its course – we can now see that the NHS was more efficient when it adopted the best and most cost-effective solutions to meeting patient needs, rather than setting out to ban agency workers for ideological reasons that do not make practical sense. Winter is coming and agency staff are the backbone of meeting peak demands on the system.”

Commenting on Public-Private Partnerships in the NHS, Neil Carberry said:

“If Public-Private partnerships work in areas such as diagnostics, data and infrastructure, then staffing, which is fundamental to service delivery, should follow the same approach. Further restricting the ability of people to work flexibly through agencies will only worsen the recruitment crisis in healthcare. There are reports of added burnout and threats to patient safety as the pressure mounts on Trusts to stop use of agency staffing. We need to address this in a collaborative way rather than treat agencies as adversaries.

“Recently, we have seen misleading reports make the same false claims about supply teaching in education. These are not based on the facts – that is why government needs to start working with specialists in the labour market more closely.”

The REC’s full Budget submission is available for download here.

​​​​​