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UK – Recruiters want job growth ahead of government Budget

19 March 2013

The UK finance minister, Chancellor George Osborne, is to reveal the government’s Budget on Wednesday and the Recruitment and Employment Confederation (REC) is urging for practical measures to be taken to stimulate growth and jobs.

“The Chancellor has got to do something about jobs and growth or the gravity defying rise in employment we’ve seen over the past year won’t be sustainable,” said REC chief executive, Kevin Green.

“The Budget is likely to focus on investment in infrastructure, however the Chancellor will find his ambitions thwarted by a lack of skilled workers to deliver big new construction projects if there isn’t an urgent focus on boosting candidate availability in key growth sectors like engineering and IT. An investment in those who currently don’t have the right skills for available jobs, be they young or old, needs urgent action not just lip service.”

The REC said that skills shortages are a major problem. It is calling for investment in higher level apprenticeships to meet the increasing demand for skilled technicians and increased ownership of training investment by employers so the matching of demand and supply of skills is more effective. The organisation also said that the government should invest in training to support older workers to transition into growth sectors and help young unemployed people find more work opportunities.

The organisation also argues that the government should protect the flexible labour market in the UK. It wants clarity and robust enforcement around regulation of travel and subsistence schemes and offshore pay roll companies so that all staffing firms play by the same rules. The government, the REC said, should also ensure that any changes to the definition of self-employment do not penalise or create uncertainty among contractors and interim managers as self-employed contractors in the public sector have been perceived as “tax dodgers”.

Chief Secretary to the treasury, Danny Alexander, announced over the weekend that tax loopholes which allow firms to dodge £100 million a year in national insurance payments through offshore payroll services will be closed under a new scheme with further details published in Wednesday’s Budget. “The loophole originally meant that some workers were at risk of missing out on statutory support as their employers were not paying national insurance. But with this new scheme in place, everyone will have access to a number of benefits, including statutory maternity or sick pay – should they need it,” said Matthew Brown, managing director of professional umbrella employment provider giant group.

Meanwhile the REC also said it wanted more support for small and medium-sized (SME) businesses through better access to finance and funding, and further reductions in corporation tax. “Most recruiters are SMEs and the vast majority of new jobs will be created by small businesses they are the backbone of our economy,” said Mr Green. “It’s vital that the government supports entrepreneurs, the self-employed and small business owners to get access to funding, a fair share of public sector contracts and the most benefit of any reduction in corporation tax.”

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