The Budget next week must not impose new costs on businesses in light of the Employment Rights Bill. This is the warning from the Recruitment and Employment Confederation.
Neil Carberry, chief executive of the REC, said that the last thing businesses want to hear about in the Budget are news of more costs or complexity.
Carberry cited the NHS staffing model as an example where short-term fixes were allowed to take precedence over the urgent need for holistic reform. He said that the NHS staffing system is in desperate need of a revamp; it does not deliver value for money. The NHS invests a lot of money in training medical and clinical staff who are then overworked, undervalued, and leave the service.
Carberry stated that non-permanent NHS employees had been treated “abysmally” in the sense of being excluded from pay increases for many years. The result was that NHS internal staffing banks were more expensive than agency models.
Carberry called for a “fundamental shift in how the previous government addressed workforce issues”. He said that since business and public investments were at the core of growth, boosting them was a better priority than short-term concerns.
He said: “Saving today in order to spend more money in three to four years is not a way to improve public services or reduce tax burden.”
The REC acknowledged that the Budget was a difficult one to make, but it said businesses needed to be able to invest more. The REC said that “an additional pound spent in rising government charges, taxes or complying to badly designed regulations is a dollar that cannot be spent on investment for the future.”
The group agreed with the ministers that an effective NHS was critical for reducing economic inactivity and improving lives over time, as well as saving money.
Ministers must put the UK workforce plan in the center of their industrial strategy. This will give both the government and the business community a better understanding of the modern labor market. Carberry said that the first Workplace Employment Relations Study in a decade was an important step towards this plan. It would inform policy by providing a realistic view of the jobs market.
He said that Rachel Reeves as chancellor must also encourage investment in skills to build a UK work force aligned with the jobs of tomorrow. He said that the Apprenticeship Levy must be reformated to enable recruiters to make better use of the millions they pay each year into the pot.
Carberry said that more investment should be made in transportation links. Investments in the Elizabeth Line, and Borders Railway have consistently outperformed Treasury expectations for growth and had an important labour market activation impact.
He continued: “By addressing the skills and labour shortages and reducing economic inactivity, we can increase our prosperity and reduce tax burden.” Improved access to jobs, particularly flexible temporary roles, will improve productivity and enhance well-being.
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