Budget Reaction

APSCo & FCSA respond to the Chancellor’s budget

Responding to Chancellor Rishi Sunak’s budget announcement today, Tania Bowers, Legal Counsel and Head of Public Policy for the Association of Professional Staffing Companies (APSCo), said: “The extension of the furlough scheme and the announcement of a new recovery loan scheme to replace the Bounce Back support is welcome news that we believe will help strengthen the UK’s employment market. As APSCo has highlighted before, though, access to aid such as this needs to be simplified and fast tracked. Businesses have previously faced delays and difficulties accessing support that has impacted the intended success of this aid.”

Bowers noted that staffing companies have a crucial role to play in getting the UK back into work and must therefore have access to the requisite financial aid to ensure they are in the best possible position to support economic growth post-pandemic. “The end of the Brexit transition period and the potential challenges attracting highly skilled workers was a particular concern that we have raised, so we are pleased to see a commitment to visa reforms for the highly skilled from the Chancellor,” she added. “While we will review the full details of the new unsponsored points-based visa system, the information revealed so far suggests that the UK will once again have easier access to highly skilled independent workers on a global scale.”

APSCo are also pleased to see their feedback regarding flexible apprenticeships had been taken on board, meaning that the flexible and contract workforce can now carry this training across multiple assignments. “The Chancellor stated that this Budget intends to protect jobs and we are pleased to see a commitment from the government to bolster employment numbers. The news that eight freeports will be developed to create new jobs, for example, is a move that APSCo welcomes.”

Phil Pluck, chief executive FCSA noted that the Chancellor forecast that debt would peak at 97 per cent of GDP in 2023/24, which represents a daunting figure in terms of the future short-term financial standing of UK PLC.

“This can only be affordable said the Chancellor if a measured debt recovery strategy in place and interest rates remain low and stable,’ he said. “The government has had a truly unique challenge to support the UK economy as it comes out of the pandemic whilst managing the debt challenge. Broadly, the FCSA both understand and support the balanced approach the budget announcement has presented.”

Income tax, National Insurance and VAT remain frozen at their current rates, as are personal tax thresholds. However, Pluck notes this means in reality, most pay packets will reduce in real terms.

Despite the support announced for freelancers, Pluck said they were still concerned that the measures brought forward were not comprehensive enough to truly support that element of the contingent working sector and many will still be exposed to little or no help. “FCSA members provide essential support to these workers and understand that they are vital in supporting the UK as it emerges out of the current Crisis,” he said.

Whilst the FCSA welcomes the fiscal support to hard-hit sectors such as retail and hospitality, there are essential elements within the announcement that Pluck says do not recognise other sectors such as the outsourced worker sector.

“Our sector is extremely resilient and is already showing growth,” he said. “It will continue to take on an even greater support role as the economy grows. But this budget fails to recognise its unique challenges.

“The present furlough scheme is unaffordable to FCSA members,” says Pluck. “To further increase employer contributions by 10 per cent in July and then 20 per cent in August and September is simply not sustainable for FCSA members.

“FCSA members have always wanted to support their contractor employees but their margins are low and the contracts they work on are short term. As a result, they cannot support those workers on terms that means they will suffer substantial losses on furloughed workers whilst still recovering from the body of the pandemic.”

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