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Spring Budget: Employment reforms urgently required to tackle skills shortages

Trade association outlines how productivity and growth can be supported.

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The UK’s economy depends on this under-supported group.
The labour market urgently needs more targeted support to benefit the UK’s businesses and economy.
UK business leaders are concerned about the labour market and skills investment.

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The Association of Professional Staffing Companies (APSCo) has called for a refocus on supporting the highly skilled temporary workforce in the upcoming Spring Budget (to be announced on 6th March 2024)  – warning that the UK’s economy depends on this under-supported group.  

In what is likely to be the last major financial statement before the General Election, all eyes will be on what policy measures will be announced – with the hope that the Chancellor will be focusing on boosting employment and growth to build a stronger economy.

According to the APSC, the highly skilled flexible labour market urgently needs more targeted support to benefit the UK’s businesses and economy and to achieve this, they believe regulation reforms will be necessary to better accommodate the requirements of the highly skilled temporary workforce. In its recommendations for the Budget, the trade association for the professional recruitment sector has outlined several reforms that would help tackle skills shortages, maximise productivity and enable growth.

These include:

  • Broadening the scope of the Apprenticeship Levy to align with skills requirements
  • Greater government collaboration with businesses on regional skills hubs and training
  • More flexible visas for highly-skilled workers
  • Legislation to define self-employment status
  • Keeping Off-payroll (IR35) under constant review
  • Updated regulations for umbrella companies and greater work to tackle rogue umbrellas
  • Action to exclude highly skilled workers from the Agency Workers Regulations
  • Supporting reasonable payment terms to protect SMEs within the supply chain

Tania Bowers, Global Public Policy Director at APSC, said: “Insufficient access to highly skilled workers remains an issue for UK employers and this on-going issue is holding back our economy. It’s imperative that the Government takes action that drives positive growth without significant expenditure. Our proposals to change Agency Worker Regulations (AWR) to exclude independent workers on rates above a set multiple of the National Minimum Wage will help make hiring cheaper and faster for firms.

“UK business leaders are concerned about the labour market and skills investment. If the Chancellor is serious about bolstering the UK’s access to skills, our recommended reforms to apprenticeships and regional skills investment should resonate. Far too many staffing firms in high-skilled and high-compliance sectors have unspent levy pots that are going to waste. These funds should be diverted into agency worker development, modular agency worker apprenticeships, returner training and supporting skills creation in sectors such as healthcare that are desperately short of resources.”

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