The sector responds to the Spring Budget

Yesterday’s Spring Budget included a number of announcements that affect the various people, place and technology professions in the UK. These include a cut in National Insurance, pension fund reforms, support for working parents, AI, helping people back in to work and more. You can see the Government’s own summary here. The various industry sectors have been quick to respond to the announcements. You can see what some people have had to say below, in no particular order.

Richard Beresford, Chief Executive of the National Federation of Builders (NFB)

“The Spring Budget offers opportunities to offset costs, invest in innovations and see paths to growth but apart from a strong hand played on energy, it doesn’t enable growth in practice. With the lack of firm planning and procurement reforms, and retrofit entirely left out, there is disquiet that the major growth opportunities will never be realised by this government.”

David Williams, head of group risk at Towergate Health & Protection

“The Spring Budget feels like a missed opportunity for the Government to recognise the enormous power of employee benefits in both reducing sickness and helping to improve the UK economy – both of which are key focus areas for the Government.

“The investment in the NHS to modernise IT equipment and improve their efficiency is welcome, but that was the only real nod towards support in the healthcare space.  The Autumn Budget in November 2023 teased us with the “Back to Work” plan to support sick or disabled adults back into work along with a launch of the occupational health consultation. But today’s budget hasn’t built on this and that’s a missed opportunity.

“There was opportunity to expand to a wider view of employer-led interventions which go far beyond occupational health services.  Employers with well-structured wellbeing programmes see reduced absence rates – often preventing absence from occurring in the first place – and more productive workforces.  It would have been great to see measures announced in the Spring Budget which encouraged or incentivised businesses to support their employees in these areas.  By building on their “Back to Work” plan in this way the Government could have taken great strides to reduce the UK sickness rates and boost the economic activity at the same time.”

Brett Hill, Head of Health & Protection at Broadstone

“The OBR confirmed that it expects economic inactivity to remain a major headwind for the UK economy.

“Despite announcements around investment in the NHS, there were no further measures announced to boost the provision of Wellbeing or Occupational Health services within businesses or to incentivise greater provision of employer-funded health benefits such as a carve out in Insurance Premium Tax or P11(d) liability for employees.

“Yesterday it was reported that private health admissions are likely to reach record levels in 2023 driven by treatments funded by Private Medical Insurance, and the importance of this market is only likely to increase. With the situation in the NHS unlikely to see real near-term improvement despite the short-term funding boost announced in the budget, the OBR’s forecast emphasises the business case for employers to invest further in the health and wellbeing of their workforce.”

Ben Willmott, head of public policy for the CIPD

“The Government’s focus on boosting research and development and growth in high-tech and green energy sectors, while critically important, is too narrow. This Budget sorely lacked a broad economic strategy to improve living standards and boost productivity across the economy including in sectors like retail, hospitality, transport, logistics and social care which employ millions of people.

“There is a real and urgent need for a workforce plan for the UK to raise employer investment in skills and support workers’ wellbeing and participation in the labour market.

“The National Insurance cut will be welcomed by many workers but it’s highly optimistic to suggest that this move alone will get the equivalent of 200,000 more people into full time work and solve for one in five vacancies. The factors affect UK labour market participation are much more complex. For instance, there was nothing in the Budget to reduce rising levels of economic inactivity due to ill health. Health policy is economic policy and requires more ambition from Government and significant changes such as improving employer access to occupational health services and reforms to Statutory Sick Pay.

“There was also very little to address skills and tackle the hard-to-fill vacancies facing many employers. We urgently need the Government to heed the long-standing calls of employers and business groups and reform the Apprenticeship Levy to reverse the collapse in the use of apprenticeships in SMEs and among young people since 2017. This vital reset would help boost training and development in all its forms and ensure that more apprenticeship opportunities go to the group that most need and benefit from them, young people.

“The Government is right to prioritise improving public sector productivity. However there needs to be a complimentary focus on improving people management and workforce skills if new technology is to be adopted effectively to improve the delivery of public services.”

Dr Marc Warner, CEO, Faculty

“After years of stalling productivity and flatlining growth, backing our brilliant AI sector is one of the few levers the Chancellor can pull to help ensure the UK remains globally competitive. The technology will play a huge part in improving public service delivery, as well as boosting workforce productivity – but it must only be used in a safe, connected and human-first way. The AI era is here, and the Chancellor’s announcement today is another positive step along the Yellow Brick Road – a path to safely harnessing AI’s vast benefits whilst managing its risks.”

Muyiwa Oki, President, RIBA 

“With a General Election on the horizon, it’s no surprise that announcements aim to boost household budgets.  But the Government has lost sight of the bigger picture and missed a key moment to improve our buildings – especially our homes.

“A weak economy, housing crisis and climate emergency demand urgent attention. Millions of substandard, ageing homes are leaking energy and money. The government must bring forward a National Retrofit Strategy – a well-funded programme to boost the green economy, cut emissions and lower people’s energy bills.

Today’s investment in new housing is welcome, but it’s a drop in the ocean compared to what is needed. Without more support, we will fail to deliver the number of high-quality, sustainable homes and places the country needs. A simplified, well-resourced planning system will not only address housing challenges, but boost sustainable development, grow the economy, and make people healthier and happier. It’s essential and long overdue.

We will continue to work with the Government to create a better built environment for everyone.”

Paul Pritchard, Senior Managing Director in FTI Consulting’s UK Tax practice

“It’s disappointing that the Chancellor has chosen to focus on reducing NIC rather than address the high marginal income tax rates which exist to disincentivise employees and impede economic growth. Whilst the Chancellor has announced his intention to address the inequality of the high income benefit charge there remains the 60% marginal income tax rate where an individual’s personal allowance is clawed back once their income exceeds £100,000.”

Helen Sachdev, director at WOMBA (Work, Me and the Baby)

“It is disappointing that the Chancellor has not used the Spring Budget to address the fine details of the government’s ‘free childcare’ promise. Although the Chancellor guaranteed rates for childcare providers to deliver the landmark offer, he failed to set out what the rates would be, raising the prospect that some childcare providers may still find the plan unaffordable.

“The ‘free childcare’ promise sparked both hope and scepticism for working parents when it was first announced. While we believe the intention behind the pledge is noble it still risks exacerbating existing inequalities rather than alleviating them, unless there is a financial investment and commitment to ensuring that all families – regardless of income or circumstance – have access to high-quality childcare options.”

Mitakshi Sirsi, Director of Sustainability at WILL+Partners. 

“We need to breathe new life into deserted commercial spaces and turn them into vibrant residential hubs where the main agenda is thriving. Picture this: the once-empty office space transforms into a modern loft, with the erstwhile boardroom table is now the heart of gatherings for friends and family, or of students in a nearby university. This vision goes beyond a mere aesthetic makeover. It’s about infusing vibrancy and warmth into our high streets, and hopefully evolving our planning system to keep up with changes that are urgently needed to help transform our buildings.

“While not every old storefront or office block is destined to become a cozy home, many buildings offer a unique narrative, ready to be unveiled by visionary architects and planners – and what’s more, this is a journey grounded in practicality. Securing the support of the community is key, and of course, environmental sustainability is just as much at the forefront of this transformation as the social and economic. I think this is an opportunity to embrace, but also one to consider very carefully as the devil is in the detail.”

Dr Joe Marshall, Chief Executive of the National Centre for Universities and Business

“In today’s Budget, the Chancellor rightly acknowledged that research, innovation and skills are central to leading the UK into a more optimistic, prosperous age. However, there were no bold, new announcements to truly shift the dial and drive growth through a more innovative, highly skilled economy. Previous commitments to grow public research funding and release more private sector investment are critical, but further intervention is needed to put university funding on a more sustainable footing. Only then will we build, grow and attract further private investment into the UK.

Marshall continued: “Last week revealed that business research and development (R&D) investment in the UK dropped by 0.4% in real terms between 2021 and 2022. It is therefore clear that existing measures alone do not go far enough to realise the UK’s Science Superpower ambitions and for the nation to reap the rewards of more jobs, more innovative and productive industries, as well as greater prosperity, security and sustainability. The UK’s Science Superpower ambition is not an obscure or remote vision but represents the UK’s fundamental plan for growth intended to deliver a tangible, positive impact on peoples’ lives, and prepare for a radically different future in the fourth industrial revolution.

Marshall concluded: “To unlock economic growth, it is vital that the Government sets an ambitious target and plan to raise private R&D investment. The Government must not forget their commitment to making the UK a Science Superpower. We need action now if we are to continue to build to secure a central role in the age of innovation.”

Simon McWhirter, Deputy Chief Executive at UKGBC

“Unfortunately we’re yet again seeing vote-chasing sticking-plaster politics as opposed to the longer term political leadership we so desperately need. The Chancellor has failed to address the urgent need for upgrading our homes and buildings in this budget, which wouldn’t just help address the climate crisis, but also directly tackle rising energy bills, poor-quality homes and provide a jobs boost into the economy.”

Amanda Lennon, employment partner at Spencer West LLP

“Whilst the National Insurance cuts and extension of the 30 hours free childcare scheme are welcome, there is nothing that will make a significant impact to the so-called “squeezed middle” earners who are not on very low incomes but have less money available to buy what they need than before, due to rising prices.  I also can’t see from the Budget where the axe might fall in public spending in order to afford the initiatives that have been announced, particularly the National Insurance cuts and increase in the free childcare scheme.”

Greg Marsh, employee money-saving expert and co-founder at Nous.co

“The Chancellor’s claims around tax cuts don’t reflect the reality for employees. When you account for the full six years of stealth taxation which the government achieved by fixing tax thresholds, the lowest earners will be poorer by around £500, and higher earners will be worse off too.

“People on middle incomes of £30,000- £60,000 will be the only winners when taking into account today’s cut to National Insurance plus other personal tax changes announced in this parliament. But, even for this cohort, this isn’t enough to undo two years of soaring prices that have eaten into household budgets.

“In the face of this reality, responsible HR leaders must explore ways of getting money back into their team’s pockets. This could include increased auto-enrolment savings schemes or access to tools like Nous that save employees money on their household bills. With huge numbers struggling to afford their essential bills, focusing on financial wellbeing solutions that harness technology to tackle this issue head-on can have a significant impact.”

Thomas Proctor, CEO at NCG

“Another budget, another example of the Government overlooking the commercial real estate sector. As an industry that supports as many as 1 in 12 UK jobs, it’s surprising that time and again it has been left out in the cold when it comes to support through public policy. While it’s understandable that the residential market attracts a lot of attention as the Chancellor looks to woo voters, it should not be a case of one or the other – this was a missed opportunity to offer support to commercial real estate.

“Axing April’s poorly timed business rate hike would have been a step in the right direction. Incentivising investment in improving the energy efficiency of commercial properties would have been another welcome step. Between market volatility and eye-watering interest rates, the sector has enough on its plate to be dealing with. It’s time the Government recognised the value of the industry – and, critically, actually took action to protect it.”

Tom Cornell, Senior I/O Psychology Consultant at HireVue

“The UK Government’s white paper, published earlier last year, failed to fully address challenges specifically relating to the use and regulation of AI. Instead, the government left regulators to manage AI within the boundaries and guidance of current jurisdictions. Establishing an AI Safety Institute is an encouraging step in the right direction, but the UK has steps to take itself before it can expect to be an influential figure on global AI regulatory policy. Currently, the UK can objectively be seen to be behind in legislating AI, and many would see this take on AI as lacking meaningful action.”