Experts weigh in on Chancellor's Autumn Budget 2021

CIPD warns Budget still leaves 'glaring gap on skills investment'

Responding to the Chancellor’s budget, Peter Cheese, chief executive of the CIPD, the professional body for HR and people development, said on skills investment:

“There is still a glaring gap between the Government’s ambition to transition the UK to a high-skill, high-wage economy and its current policies and investment priorities.

“Piecemeal interventions like those announced today are unlikely to amount to a skills revolution, more an evolution of things that already aren’t hitting the mark for many employers or jobseekers.”

“There needs to be an economy-wide, joined-up strategy to encourage and enable more firms to adopt strategies where the workforce is recognised as something to be invested in and drives value, rather than a cost to be minimised.

“Today’s announcements focus heavily on the supply-side and giving money to existing programmes, but it’s unclear if these initiatives deliver on what employers need or if they are creating positive work opportunities. There was also little on how the Government will incentivise and encourage employers to invest more in skills themselves. After a decade of underinvestment in skills we need employers and government to be looking not just at routes into work but in-role development too.

“Increased investment in T-levels is a step towards improving technical skills but many employers simply don’t know enough about them or fully understand them. Given current pressures on businesses, there’s also concern over whether enough employers will be able to offer the work experience element.

“Equally, if the Government wants to work in partnership with business to create a high-skill, high-wage economy, it must listen to business and reform the Apprenticeship Levy into a more flexible training levy. The Levy in its current form has failed on every measure, coinciding with a reduction in apprenticeship starts overall, a fall in the proportion of apprenticeships going to young people and a reduction in employer investment in training. Failure to reform the Apprenticeship Levy continues to hold back employer investment in skills at a time when this has never been more important.”

On pay increases, he says:

“Increases to the National Living Wage and pay increases for the public sector are welcome. However, for this to be sustainable we need to fix Britain’s stubborn productivity problem. There must be more support and encouragement for businesses, and SMEs in particular, to invest in people management, skills and technology to improve productivity and create more, and better quality, high-paid jobs.

“Equally, higher pay in itself isn’t enough to retain and recruit staff. Businesses must also be looking at providing sufficient training, development and progression opportunities. And now, more than ever, support people’s wellbeing and respond to people’s increased expectations for flexible working practices.”

27/10/21 Updated at 16.00pm

Skills investment could hold key to overcoming existing crisis

International recruitment agency, Aspire, has responded to the Chancellor’s Budget 2021 speech. Aspire chairman and founder, Paul Farrer, commented:

“This Budget paints a positive picture. Unemployment is falling, wages are rising and economic forecasts are strong. The commitment to invest further in innovation, skills and infrastructure across the UK should create jobs, boost employment and prove important to economic growth.

“A Global Talent Network is a welcome development, on the face of it. As is the £560m that will be spent on improving basic maths skills, to help people get back to work. These initiatives and the £3.8bn skills investment promised could hold the key to overcoming post-Brexit challenges and solve the UK’s skills crisis once and for all.”

27/10/21 Updated at 15.15pm

"Sparing the self-employed doesn’t paper over cracks", tax expert claims

Seb Maley is the CEO of Qdos, a firm specialising in tax support for the self-employed. He said: “There are
two ways to view this Budget. On one hand, it’s a relief there are no major tax changes affecting the self-employed. On the other, many will feel the damage has already been done.

“The recently announced social care levy, corporation tax changes in 2023 and IR35 reform have and will hit freelancers, contractors and small business owners hardest. And the cut to business rates, while welcome, won’t be felt by those who work remotely and don’t want or need premises.

“In his speech, the Chancellor was self-congratulatory about the government’s treatment of entrepreneurs. This is now a tired out, unconvincing rhetoric and one that’s falling on deaf ears.

“Sparing the self-employed in this Budget speech doesn’t paper over the cracks. These workers are bearing the brunt of short-sighted, quick-fix tax reforms that endanger this vital cog of the economy, rather than support it.”

27/10/21 Updated at 15.00pm

"The Chancellor's changes need to be felt on the ground ASAP"

Ann Francke, CEO, Chartered Management Institute, said: “Managers and leaders across the UK will agree with Rishi Sunak’s aspiration for a new age of optimism.

"Some of the Chancellor’s key announcements, including increased funding for skills and apprenticeships are an important step in the right direction - together with targeted cuts to business rates, which hold back investment in our people. The Chancellor must now ensure that the benefits of these changes are felt on the ground as quickly as possible.

"A clear and stable funding settlement for universities is still needed to help achieve the Government's goals of levelling up and enhancing productivity.

"Our universities and the areas that depend on them still need to see further detail on higher education funding, which is so important to the improvement of management and leadership, over the coming weeks.

“The Chancellor must deliver on his aspiration to reduce the tax burden on businesses and people by the end of this Parliament. A lower-tax environment will enable more firms to invest in the management and leadership skills the UK needs to become the high-wage and high-productivity place we all want to see.”

27/10/21 Updated at 14.30pm

Government must deliver a long-term vision

Deputy CEO of the Recruitment & Employment Confederation Kate Shoesmith says:

"The Chancellor said today was about preparing for a new economy. To really deliver on that, what we need to see from government is a long-term, strategic vision for the whole UK workforce. Businesses up and down the country are battling labour and skills shortages. They need the right levers to enable the right type of investment in workforce development and growth - only that growth can make wage rises sustainable and improve the public finances long-term. That means ensuring businesses have the financial headroom and incentives to invest here in the UK, as well as the skills support that is needed.

"Today’s pledge for more spending on skills is a step in the right direction - but what is long overdue is a revolution in how we deliver training and skills. The apprenticeship levy is acting as a brake on prospects for young people, and progression for many workers. It needs to be overhauled, so that it supports people at and into work properly. There is also still not enough focus on entry-level skills, where the most acute shortages are, so we hope to see more on that in the detail of the skills bootcamps announcement.

"In terms of encouraging business investment and improving productivity, funding for transport outside London, the Global Britain Investment Fund and the Annual Investment Allowance extension should help to boost local and regional economies and growing businesses. Struggling sectors will be pleased to see cuts to business rates, but this was a missed opportunity for more radical, long-term reform. We would like to see the departments for work and pensions, business and education work together in a joint forum with business on measures that will help to level up the entire country and produce the high pay, high skill economy that we are all aiming for."

27/20/21 Updated at 14.15pm

SJ Boulton, Global Curriculum lead at Labster comments on the skills gap and funding for education:

“It’s fantastic news that Rishi Sunak today announced a £3bn investment in skills and education. Since the pandemic began, the education sector has undergone a massive shake up – technology evolved and hybrid learning became the norm but all while the attainment gap increased. As such, it’s crucial that the government prioritises accessible education to ensure the skills gap doesn’t widen and no-one is left behind.

"Further investment in T-levels, extra classroom hours, the adult Skills Fund, traineeships and skills boot camps are all such important initiatives to help those entering the digital workforce feel prepared. I’d also like to see increased investment in education technology as the benefits of virtual learning, especially when combined with classroom teaching, cannot be overlooked. Virtual learning provides an opportunity to not only bridge the skills gap and future-proof learning, but empower teachers, businesses and individuals by opening the door to high-quality education, wherever they are in the world.”

27/10/21 Updated at 1.00pm

Cyber skills pledge is 'welcome news'

Camellia Chan, CEO and Founder of Flexxon comments on the cybersecurity skills gap addressed in the Chancellor's Budget.

Chan says: “There is a global shortage of talent in technology, particularly cybersecurity and those specialising in AI and SSD, so the UK government’s £3bn investment in skills and education is welcome news. Seeking employees from other parts of the world is one way to plug the skills gap, but nurturing local tech talent is absolutely crucial.

"Indeed, other countries have realised this before – in Singapore we have initiatives from Enterprise Singapore and the Workforce Singapore Agency’s talent matching efforts, for example. For the UK, the increased investment in T-levels and the adult Skills Fund are two positive initiatives. What’s more, the 24,000 traineeships and £550m towards skills boot camps in areas such as artificial intelligence and cybersecurity is incredibly exciting. These schemes will create a tech workforce of diverse talent with different ages, genders, nationalities, and domains to create an impactful and innovative environment in the UK and beyond.”

27/10/21 Updated at 12.50

Chancellor addresses Parliament

Rishi Sunak has begun addressing MPs in the House of Commons.

"Employment is up, investment is growing, public services are improving, the public finances are stabilising and wages are rising" he says.

He continues: “...where the only limit to our potential is the effort we are prepared to put in and the sacrifices we are prepared to make”.

27/20/21 Updated at 11.45am

Bridging skills gaps

Stephanie Kelly, Chief People Officer at IRIS Software Group, recently said she expects to see the chancellor roll out initiatives that lead to a "highly-skilled, highly-paid workforce equipped with the latest digital technology in line with his speech at the Conservative party conference"

Kelly added that it’s likely to be a requirement on businesses to bridge skill gaps and increase productivity across the UK.

Ultimately, she said, regardless of what is unveiled in the Budget Review, businesses have to be on their toes. “To manage the impact of the budget, whatever the outcome, businesses need to think laterally about how to deal with changes,” she said.

“It’s critical they don’t shy away from trying new things and aim to improve business operations overall. This will help businesses stay agile and able to seize every opportunity to create short and long term competitive advantage.”

27/10/21 Updated at 11.20am

Levelling up

One of the things the CMI is urging the Government to consider in the Review, in order to ensure the UK workforce and economy thrive in the coming years, is to maintain current spending levels on higher education, as well as to protect apprenticeship funding; building management development into education, training and sector policies, including four core skills – communication problem-solving, teamwork and digital competency – into all Government funded training provision.

They also say it is vital that all Government procurement bids should be required to include management and leadership development.

“Levelling up has got to be about people as well as places, and its success is predicated on a rock-solid commitment to funding education and training,” Ann Francke, Chief Executive of the CMI, says, adding that the Chancellor has “a golden opportunity” to demonstrate his personal passion for improved management by committing to long-term investment in training and leadership skills, and by putting improved management at the heart of every contract the Government enters into.

She continues: “Sustained funding for higher and further education must be at the heart of ‘levelling up’ and ‘building back better’. Ministers’ aspirations won’t become a reality unless we see a commitment to building Britain’s human capital at the very heart of this Spending Review” Daisy Hooper, Head of Policy at the CMI, added that “the Government, as an employer, could really show us all what ‘best practice’ looks like in training and development”.

27/10/21 Updated at 11:10am

"New age of optimism"

According to The Guardian, Sunak will say during his Budget announcement:

"Today’s budget begins the work of preparing for a new economy post Covid. An economy of higher wages, higher skills, and rising productivity. Of strong public services, vibrant communities and safer streets. An economy fit for a new age of optimism. That is the stronger economy of the future."

27/10/21 Updated at 10:50am

The economic outlook

According to Debapratim De, Senior Economist at Deloitte, the key announcement in the Budget will be the Government's new fiscal rules, outlining its roadmap for rebuilding public finances.

With rising inflation and the growing likelihood of interest rate rises, he says, the Chancellor will be keen to signal to markets that he is committed to setting borrowing and public expenditure on a sustainable footing.

“This seems achievable without stinging spending cuts, in the short term,” he continues. “With the OBR widely expected to trim its estimate for the long-term damage to the economy wrought by the pandemic, the Institute for Government calculates a potential £25bn annual windfall for the Treasury. This should give the Chancellor ample room to meet long-term fiscal targets without a dramatic readjustment in planned spending.”

27/10/21 Updated at 10.30am

What is the Chancellor expected to announce?

Rishi Sunak's official announcement will be made this afternoon in the House of Commons, shortly after PMQs at 12.30pm. Ahead of his speech, several details of what the address will include have been revealed:

As reported by the BBC, policies already unveiled from the chancellor's Budget include:

  • £6.9bn for English city regions to spend on train, tram, bus and cycle projects - including the £4.2bn promised in 2019 alongside funding for buses announced by the PM in 2020.
  • £5.9bn for NHS England to tackle the backlog of people waiting for tests and scans.
  • A rise in the National Living Wage from £8.91 per hour to £9.50, to come into effect from 1 April.
  • £2.6bn to be spent on creating 30,000 new school places for children with special educational needs and disabilities.
  • £1.6bn over three years to roll out new T-levels for 16 to 19-year-olds and £550m for adult skills in England.

27/10/21 Updated at 10.25am

Today, October 27th, Chancellor Rishi Sunak will be releasing the Government’s Autumn 2021 Budget Review, and predictions about what measures will ensue for employers are coming in thick and fast. But first, here's a recap of what the Chancellor announced in the Spring budget earlier this year...

  • From April 2023 the rate of Corporation Tax paid on company profits will increase from 19% to 25%; companies with profits under £50,000 will remain at 19%, meaning only 10% of companies will pay the higher rate
  • A new small profits corporation tax rate of 19% will be introduced in April 2023
  • A 130% 'super deduction' will be introduced for capital investments in qualifying new plant and machinery
  • Trading losses can temporarily be carried back for three years

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