REC responds to Spring Budget

Responding to today’s Spring Budget, the Recruitment and Employment Confederation (REC) Chief Executive Neil Carberry said:

“If the Chancellor’s goal was to stimulate investment and drive per person growth, he hit the post.

“There were plenty of initiatives in the Budget today that business will welcome. 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.

“It beggars belief that the Chancellor made GDP per capita, driven by the domestic workforce, a core goal of his speech but had nothing to say about the skills system beyond a few specific pots of spending and pieces of devolution. Further focus on childcare will be welcomed by employers all over the country, though. 

“Cutting employee National Insurance is the right call when addressing personal taxation, because it is targeted on workers and particularly helps the low paid. 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% 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. 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.”

Ends

Notes to editors:

1.    In REC’s Overcoming Shortages report, it shows, with a 10% surge in demand for staff across the economy, and the labour market restricted by shortages, we could see a 1.2% fall in expected GDP and productivity by 2027 – costing the economy anywhere between £30 billion and £39 billion every year. This figure is just short of the entire current defence budget, or two whole Elizabeth Lines.

2.     REC believes it is such a waste that, by our calculations, out of the one million temporary workers on assignment in the UK every day, around 960,000 are ineligible for apprenticeship levy funding. This is mainly because the funds are only available to those who have the same employer for at least one year (i.e. the time it takes to complete an apprenticeship).

3.     REC commissioned Savanta to survey by telephone in February 2024, 167 employers of different sizes, locations and across private and public sectors. The REC/Savanta survey question asked which of the following options, if any, does your business most needs to hear in the Spring Budget

Selection percentage of options as Top Priority

• Improving tax system to support business investment (41.7%)
• Increase access to AI and business automation technology (5.4%)
• Pro-business reforms of immigration rules (3.6%)
• Reform to the apprenticeship levy and training provisions (5.8%)
• More coordinated approach to support green jobs and green investment (2.8%)
• Greater childcare support for parents (11.3%)
• Further investment in local transport (9.8%)

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The REC is the voice of the recruitment industry, speaking up for great recruiters. We drive standards and empower recruitment businesses to build better futures for great candidates and themselves. We are champions of an industry which is fundamental to the strength of the UK economy.

Find out more about the Recruitment & Employment Confederation at www.rec.uk.com.