PRE-BUDGET REPORT REC RESPONSE
PRE-BUDGET REPORT REC RESPONSE
The Pre-Budget Report included a number of specific measures that are of direct relevance for the recruitment industry. The Report came on the same as the latest Report on Jobs data which shows the sharpest increase in demand for staff for twenty-eight months. However, the labour market remains fragile which is why measures are needed to help business and stimulate job creation as well as provide support for job-seekers.
Commenting on the implications of the Report for the overall jobs market, REC Chief Executive Kevin Green says:
This was a crucial pre-budget report for jobs. Whilst we welcome measures to support jobseekers such as extending training or work for under 25s after six months and funded internships the Government have not gone far enough in terms of stimulating demand for staff. The Chancellor underlined the crucial role of the UKs flexible labour market
in limiting unemployment. The way that new regulations in particular, the EU Agency Workers Directive - are implemented will be an acid test of the Governments commitment to protecting the viability of flexible working options.
As significant announcement was the commitment to address the problem of potentially exploitative arrangements which make use of the tax and NIC expenses rules for some workers paid at or near the National Minimum Wage (NMW). HM Treasury, HMRC and the Department for Business, Innovation and Skills, will launch a consultation on this in the New Year.
Commenting on this development, Anne Fairweather, the RECs Head of Public Policy says:
"REC welcomes the decision to address the issue of the use of salary sacrifice arrangements when they lead to deductions below the minimum wage, for the purposes of running a travel dispensation scheme. For too long it has not been clear how this is viewed by HMRC and REC is pleased to see that this issue is going to be resolved."
Although no specific cuts public expenditure cuts were announced, there will continue to be a huge focus on public finances over the coming year.
Commenting on the implications for recruitment and employment, Tom Hadley, the RECs Director of External Relations says:
The Government must get public finances in shape. However, it is crucial to recognise the importance of flexible staffing as a cost-effective means of delivering crucial front line services. More analysis is need into the value of flexible employment models in the public sector. The REC will be launching a specific campaign on this issue in the New Year.
There was some good new for small businesses for example an extension of the Government loans guarantee and the Chancellor highlighted the fact that there had been substantially less insolvencies than predicted.
Commenting on this and on the outlook for business start-ups, Sam Strange, Director of the Business Support Unit within the REC Academy for Business, says:
It has been a difficult time of all small businesses and start-ups which is why we welcome the extension of practical measures on issues such as financing and tax payments. At the same time, a key factor in helping organisations to survive and thrive has been the provision of effective business support services. This is one reason that the recruitment industry and other sectors have not seen as many insolvencies as many predicted.
In terms of sector-specific announcements, REC has welcomed that fact that there will be no immediate action on the issue of false self-employment in construction. The treasurys initial proposals in this area could have added substantial additional cost and uncertainty without addressing the core issue which is why the REC lobbied for any legislative change to be deferred.