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UK — REC publishes a full response to the latest UK budget

26 March 2010
Following the Recruitment and Employment Confederation's (REC) initial statement published in The Daily News yesterday, a more detailed analysis has been developed.

Commenting on the overall implications of the budget, REC Chief Executive Kevin Green says, "REC welcomes the range of measures to help businesses such as enhancing access to credit and reducing business rates for SMEs. However, the overall economic outlook remains one of concern with the Chancellor forecasting only 1 to 1.5 per cent growth. This confirms that the road to recovery for the UK jobs market will be very slow-going."

Green continued, "additional support and training measures announced by the Chancellor will not help unless we boost demand and lift barriers to job creation, such as excessive employment legislation and business taxation. Within this context, it is disappointing that there has been no move to shelve the proposed increase in National Insurance which is tantamount to a tax on jobs."

The Chancellor announced an extension of the Jobs Guarantee for young people aged 16 — 24 until March 2012. This measure ensures that every young person is offered a job or training after 6 months of unemployment. On these job creation measures Kevin Green commented, "We need to ensure that these jobs give people the skills and experience they need to succeed in a competitive labour market and we are uncertain whether this guarantee will lead to longer term employment. Assessing the effectiveness of support measures for young jobseekers is one of the aims of the REC's Youth Employment Taskforce which will report after the election."

Public sector reform
Looking ahead, a major challenge for the industry is how public expenditure cuts will impact on public sector recruiters. Commenting on these changes Tom Hadley, Director of External Relations at the REC said, "The Budget did not reveal where exactly the public sector spending axe will fall. Specific references were made to reducing the use of agency staff in the NHS and the Home Office. The REC believes that simply slashing agency staffing budgets is not an appropriate response. A radical new approach to public sector service delivery is needed to create efficiency. Flexible staffing arrangements are a key part of this and we will continue to push this message through our Public Sector Resourcing campaign."

On plans to relocate 15,000 civil servants from London, Tom Hadley continued, "Mass relocation projects need to be carefully managed. Inevitably some staff will be lost. Recruiters, with knowledge of local labour markets and the skills which are readily available, can work in partnership with public bodies to ensure public service delivery is not adversely affected through these changes."

Regulatory bodies and inspectorates
A paper on Arms Length Bodies was published alongside the Budget. Many of these bodies interact with the recruitment sector, such as the Care Quality Commission and the Gangmasters' Licensing Authority (GLA).

Commenting on the proposals, Anne Fairweather, Head of Public Policy at the REC said, "we welcome the move to improve governance of these bodies and the role of their Boards. These bodies need to be held to account effectively by their Boards and the REC will feed into the review of those bodies which interact with the recruitment sector."

Specific implications for Interim Management
The budget includes specific proposals to cut back on the use of management consultancies. On this matter Scott Pendry, Policy Advisor to the Interim Management Association, which is part of the REC, said "The move will save the public sector money, but like any large organisation, public bodies will still need to call in specialist advice on occasions. Often the most cost effective way to do this is to bring in interim managers for specific projects."

The Budget announced that the Government would continue to look for a legislative solution to tackling false self-employment in construction. However, this will only take place after further consultation with stakeholders. On this matter Chris Richards, Policy Advisor to the REC Construction Group, said "we welcome the fact that the Treasury have not pressed ahead with their original proposal. It ran the risk of classing genuinely self-employed workers as employed for tax purposes and heaping costs onto the construction trade when it can least afford it. REC will continue to work with the Government to ensure that any legislative solution tackles genuine abuse effectively."


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