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Budget - REC highlights five steps to jumpstart UK jobs market

Budget - REC highlights five steps to jumpstart UK jobs market

The REC is calling on the Chancellor to deliver a confidence-building Budget focused on supporting business and improving the labour market during the current financial downturn.

In a letter to the Chancellor Alistair Darling ahead of this weeks budget, REC Chief Executive Kevin Green outlined five key steps for helping jobs and underlined the urgent need for action. An REC survey of 350 recruiters in the front line of the UK labour market shows that over 70 per cent have witnessed a significant decrease in their turnover (over 20 per cent) in the past three months, reflecting the difficult conditions in which they are currently working.

Commenting on the Budget - which falls on the same day that new unemployment figures are set to be announced, Kevin Green said: We need to see Government doing all it can to support businesses through the recession and so safeguard the wealth creation part of our economy. We must jumpstart the jobs market and not add to the cost of employing people when many businesses are fighting to remain solvent.

With unemployment still rising, the focus needs to be on providing expert support and guidance for newly unemployed job seekers as well as on helping organisations train their staff and improve competitiveness. The Budget must provide a launchpad to boost the economy and labour market so that UK plc is in the best possible shape to take advantage of the upturn when it arrives.

The five steps the REC is asking the Chancellor to take to boost the jobs market and to support the recruitment industry are:

Help job creation through the tax regime and maintain the Business Payment Support Service
Avoid adding cost and bureaucracy through more employment regulation and procurement policy
Actively promote flexible work options as a way back into the jobs market
Ensure jobseekers get the right advice and support by harnessing the contribution of the private sector
Address other major business issues like bad debt, late payment and lack of financing which prevent job creation

On the first step, the REC is renewing its call for the Treasury to reconsider its decision to withdraw the VAT staff hire concession which is leading to reduced numbers of temporary work opportunities. The REC is calling for proposed National Insurance contribution rises to be reviewed as these will create a barrier to job creation. The fact over 60 per cent of REC members are currently taking advantage of the Governments Business Payment Support highlights the importance of maintaining this service.

With regards to the regulatory agenda, It is critical to avoid further costs and bureaucracy being added to the recruitment process - particularly with regards to the UK implementation of the EU Agency Workers Directive. Public procurement also continues to be a major source of bureaucracy for business.

A key proposal put forward to Government is the need to actively promote flexible work options such as temporary, contract and interim management work as a way back into work. This will be crucial when employers start increasing staff through the use of agency workers and must involve removing barriers in the current benefits system by making is easier and quicker for job seekers to get on and off benefits.

With more jobseekers at the higher end of the market, the REC believes it is imperative they receive the right support and guidance. Specialist recruiters can play a key role in providing the necessary support, which is why it is crucial that the Government harnesses this contribution.

In terms of addressing other major issues for businesses, credit conditions continue to be extremely difficult and are a clear barrier to employment creation. The Government must keep encouraging the financial sector to provide realistic conditions for financing businesses especially those who are innovating and moving into new sectors, which ultimately lead to new jobs.

The reduction of trade credit insurance is also affecting a number of sectors and the Government can play a key role by providing state guarantees as a safety net to underpin trade credit arrangements.


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