Rachel Reeves’ spending review with its boost for sectors including the NHS, education, tech and housing has been met with a mixed response from recruitment and talent leaders. While Tania Bowers, Global Public Policy Director at the Association of Professional Staffing Companies (APSCo) notes the review didn’t come with any great surprises, it did more for promising future returns, than offering confidence to businesses today.
“Companies are nimble and move quickly, so while we welcome investment in longer-term skills and economic growth, the short-term must not be neglected,” she noted. “Unfortunately, we are already seeing the impact of this oversight, with offshoring and hiring freezes being more acutely felt.”
Bowers says the situation is not being helped by the Government’s approach to the professional staffing sector. “Reforms to employment regulation may be required, but not to the detriment of an accessible and flexible workforce,” she said. “It was disappointing to hear the Chancellor reference the ban on zero-hours and fire & rehire practices in her speech, for example. Yes, exploitation needs to be stamped out in the workforce, however, an unnecessarily rigid process won’t be beneficial for anyone, particularly not skills short remits such as healthcare and the NHS.”
That said Bowers welcomed the focus on skills and training: “The money for skills is clearly focused on the young, construction workers and getting the economically inactive back into work, which are all sensible steps. However, this needs to happen in parallel to building up more technical skills, particularly given the focus on AI. Boosting training and apprenticeships for young workers is necessary, but so too is greater flexibility around skills investment outside of this demographic, which industry leaders have long called for.”
Neil Carberry, Recruitment and Employment Confederation (REC) Chief Executive, agreed with the government that only growth can right the fiscal balance and fund public services.
However he described the spending review as only representing half the journey required: Investment in transport will have a big effect – boosting workforce mobility, bridging skills gaps, and driving productivity. He also notes that commitments to long-term energy, technology and green investments matter because they give firms certainty to invest behind stable government plans. “But we need to go further,” he said, “addressing public service productivity and prioritising public spending and government action to those areas where it can make the biggest difference.”
The missing piece of the puzzle says Carberry is delivery. “Despite talking about the need for a deep pool of talent, there was little on workforce today – yet we know this is the critical part of getting where we need to go without further tax rises,” he said. “And not just on skills – where the prospect of apprenticeship levy reform is exciting but we await practical details.” Carberry says the upcoming Industrial Strategy is the opportunity to do this – dealing with workforce development as an economic essential, rather than just an employment rights issue. “Across the country, REC members are helping build power stations, renovate our railways, drive British manufacturing and invest in our defence,” he said. “Proper partnership with the sector to deliver a workforce strategy that meets the needs of the mid-21st Century will be essential.”
Ben Willmott, head of public policy at the CIPD was also cautious around the governments’ intentions: “The plans announced today provide a welcome boost for a number of the UK’s key sectors, but we need to see greater ambition from the government if we’re to improve productivity and living standards across the country,” he said.
“There’s a danger the plans overlook some of the biggest challenges facing businesses across all sectors of the economy. These include the need to improve the skills and health of the workforce and accelerate the wider adoption of new technology and management best practice.
“Tackling these challenges requires a joined-up workforce strategy for the UK, underpinned by improvements to policy around skills, business support, employment relations, occupational health and labour market enforcement,” said Willmott.
