From an employment perspective, a key theme from yesterday’s budget is “breaking down barriers that stop people working”. Whether that be by assisting people to get into work, remain in work, or get back to work, there is a strong message to assist individuals that want to work, which will ultimately assist the national economy. 

But what does this really mean for employers?

Starting work

The Chancellor has proposed measures to assist those who may currently struggle to obtain employment, to be provided with additional support and assistance to be able to access work opportunities. This includes measures for those who may be long-term sick, or disabled, by reforming the disability benefits, meaning that financial support will not be lost, if an individual wants to obtain work. A Universal Support Scheme will also be introduced to assist disabled employees with their job search.

In addition, support will be provided for the transition from education into the workplace for young people in care and young people with special educational needs and disabilities.

Although, the budget does not only focus on those who may be unable to access work due to ill health or disability. The Chancellor has advocated that anybody who is capable of work, should work, and therefore enhanced the sanctions imposed on those who are unable to meet the work-search requirements for Universal Credit eligibility. 

Staying in work

Continuing the theme of supporting individuals to access work, the Chancellor has also proposed funding to keep people in work. This will apply to individuals with health conditions, with a view to preventing them from having to stop working due to ill health. 

Employers should also be aware that the Chancellor has in particular acknowledged the importance of occupational health. Consultations will therefore be run to assess how the availability of occupational health can be improved, and importantly, the small company subsidy pilot will also receive additional funding. This will ultimately assist employers with the provision of occupational health. 

Over 50’s, to get back into work

The final part of the employment cycle, is the Chancellor’s aim of encouraging ‘older’ workers back into the workplace. To do so, a new kind of apprenticeship will be introduced, called “Returnerships” (which focus on “flexibility and previous experience to reduce training length”) and skills boot camps and sector-based work academies will also be introduced. 

A further incentive to encourage the ‘older generation’ back to work, and to maintain existing workers, is to increase the annual tax-free allowance for pensions, to £60,000 (a 50% increase). 

In addition, the pension Lifetime Allowance will be removed. Whilst this amendment is unlikely to impact a large proportion of the workforce, employers should be mindful that more senior employees, who may have been close to the allowance and potentially planning on early retirement, or reducing their hours to avoid the tax implications, may continue working for a few more years.  

Childcare

I would be unable to provide a summary of the Spring Budget, without also mentioning the amendments to the childcare system. Whilst it may not have come under the “employment pillar” of the growth budget, there are likely to be potential implications for employers.

So, in acknowledging that the UK has one of the most expensive childcare systems in the world, the Chancellor intends to support women and families to get into work, or return to work, by providing additional funding for child care, along with increased funding to facilitate the provision of wrap-around care.

The cost of childcare currently outweighs a salary for many people and therefore this amendment is likely to have an impact on the number of parents willing to return to work after maternity/paternity leave. The chances of employers maintaining employee talent, rather than losing them as a result of family-related leave, is therefore likely to increase. 

So what does this mean? 

The key aim of the Budget appears to be to reduce unemployment by encouraging people into work. If successful, employers should therefore expect to see an increase in the number of applicants applying for job vacancies and this will hopefully assist with the current recruitment issues that a number of sectors are experiencing. 

However, this also means that employers need to ensure that their recruitment processes and policies are fit for purpose. Are your recruiting managers aware of the potential discrimination risks that may arise during the recruitment process and how these can be reduced? An increased number of applicants may result in difficulties with shortlisting. Employers should therefore ensure that they have a fair policy for shortlisting and selection, which results in the best applicant being appointed for the role.

https://www.gov.uk/government/speeches/spring-budget-2023-speech

https://www.gov.uk/government/publications/spring-budget-2023/spring-budget-2023-html