What does Sunak’s £500m funding to support employment in the UK really mean for businesses?
Chancellor Rishi Sunak has announced that thousands of employees across the UK will be supported as part of a £500m expansion of the government’s ‘Plan for Jobs’ campaign.
Workers leaving the furlough scheme and unemployed people over the age of 50 will be helped back into work as part of more the plans.
Those on the lowest wages will also be helped to progress in their careers and existing schemes targeting young people will be extended into next year as part of the new package which could help hundreds of thousands of people into work.
Starting in April 2022, the Government is enhancing its programme of support for workers on Universal Credit. More people who are in work on Universal Credit will be able to access work coach support, which will focus on career progression advice, and Job Centre Plus specialists will work with local employers to identify local opportunities for people to progress in work.
Workers over the age of 50 are also set to benefit from a new enhanced support package to help them to stay in and return to work.
This new package will ensure older workers will receive better information and guidance on later life planning, helping them make informed choices and supporting them to plan their career and remain in work. For those who have lost their jobs, this funding will ensure that older job seekers on Universal Credit receive more intensive, tailored support as they look to take the next step in their career.
However, what does it all mean for the UK economy and its business community?
The impact of the funding
Following Rishi Sunak’s announcement of the additional funding to support employment in the UK, Business Leader heard from Simon Reichwald, Strategic Lead for Talent at MyKindaFuture.
He said: “With the end of furlough likely to cause unemployment rates to rise, at least in the short term, any additional investment to support employment in the UK is good news. That said, the Chancellor’s statement today leaves some questions unanswered.
“For example, whilst the Job Finding Scheme, which provides one-to-one support with Jobcentre Plus Work Coaches for those coming off furlough, will undoubtedly be beneficial, Sunak is yet to confirm how this will be facilitated. We know that Work Coaches are already asked to do a lot and so are spread thinly, with just a finite amount of time allowed per appointment. So, much more resource would be required in order to make this promise of additional one-to-one support a reality.
“Similarly, whilst the extension of the £3,000 apprenticeship incentive for business demonstrates positive intentions when it comes to introducing more apprentices into the workplace, questions have already been raised regarding the effectiveness of this scheme. Critics have rightly argued that £3,000 simply isn’t enough to encourage businesses to hire more people than planned and thus drive up the number of apprentices. Instead, the scheme risks making hiring apprentices cheaper for those who were planning to do so anyway
“The Chancellor’s announcement demonstrated some positive steps towards countering Britain’s ongoing employment challenges, with the extension to the Kickstart scheme in particular likely to make a real difference to unemployed young people. However, more detail around the execution of plans such as the Job Finding Scheme and apprenticeship incentives is needed in order to determine whether these will make a real impact and help us to truly ‘build back better’.”
JC Townend, Chief Executive Officer for LHH UK & Ireland – a national outplacement provider – continued: “We welcome the announcement that the government will be funding additional measures to help smooth the end of furlough and help workers get back on their feet, especially in hard-hit sectors that have not yet recovered. However, what we’re seeing now is a big mis-match between the skills of workers being made redundant and a hot job market in other areas. Redundant workers will need more than just a cv and interview skills. They need professional support in identifying whole new careers, and setting a new path in reskilling and support to get there. The most compelling companies are investing in helping their redundant workers find new careers elsewhere, or even reskilling and redeploying within their own firms.”
Ed Hussey, director of people solutions at accountancy firm, Menzies LLP, said: “This support package is welcome news for the many thousands of UK workers finding themselves out of work and without the support of the furlough scheme. The only question is, will it be enough to help them to find jobs, so they can at last get on with their lives?
“Businesses can play their part in helping people back to work, at the same time as strengthening their skills base, by taking advantage of the Government’s decision to extend the KickStart Scheme until March next year. This scheme is designed to benefit young people on Universal Credit and has been proving popular with both employers and workers. The decision to extend the £3,000 incentive for businesses taking on a new apprentice to the end of January 2021 could also help to fill skills gaps. Employers can maximise their subsidies and support by using the KickStart Scheme as a trial period for new employees, the best of whom can then become an apprentice, and there is lots of free support available for companies to navigate the process and maximise their benefits.
“The decision to extend the period of support is significant as it is clear that the pandemic is continuing to cause disruption for many sectors, at a time when households are being affected by rising costs. The measures announced are just for the short-term however, and there is a risk that the economic cliff-edge facing many households has just been pushed a bit further away.”
Tech and innovation
James McLeod, VP EMEA at Faethm AI specifically discusses the impact of technology and automation on the job market, and argues that businesses need to be incentivised to retain furloughed staff, retrain them in essential digital skills and competencies, and redeploy them in more in-demand roles where they can offer longer-term benefits and growth opportunities.
He said: “With all eyes fixed on how unemployment figures may change now the furlough scheme has closed, this investment in jobs from the Government is a positive step.
“It is particularly timely that the Chancellor has promised to reshape the economy around technology and scientific innovation, as many businesses impacted by the pandemic have invested in intelligent technologies such as AI and automation to reduce costs. Without action like this from Government and employers, we run the risk of many furloughed employees being digitally displaced.
“The impact of technology on the skills needed for modern jobs, and the effects of the end of the furlough scheme, shouldn’t lead to skills shortages and mass unemployment. This is a critical juncture for the UK, and businesses need to be incentivised to retain furloughed staff, retrain them in essential digital skills and competencies, and redeploy them in more in-demand roles where they can offer longer-term benefits and growth opportunities. That way businesses can add capacity and increase productivity, all while making financially beneficial and morally responsible decisions, and developing a digitally adept workforce for the future.”
What else has Sunak announced?
Business Leader received the below comment from Kirstie Donnelly, CEO of City & Guilds Group, regarding Rishi Sunak’s announcement to extend the Kickstart Scheme as well as the introduction of an AI scholarship plan in his speech at the Conservative Party Conference.
She comments: “Last week, the furlough system came to an end, leaving the jobs of a million people across the UK hanging in the balance. Half of those were workers aged 50 and over. Whilst unemployed young people saw interventions and safety nets put in place during the pandemic, unfortunately the same could not be said for older workers. Our recent Skills Index research highlights that older workers also suffer from a chronic underinvestment in training, meaning many will struggle to re-enter the workplace despite their wealth of knowledge, skills and experience.
“We have seen Rishi Sunak announce an extension to the Kickstart scheme as well as the introduction of an AI scholarship plan. Whilst these announcements are a positive step for the economy, they are once again tailored towards supporting young people. It is disappointing that the anticipated £500 million support package for displaced workers, including support older workers, was not mentioned in the Chancellor’s speech. We urge the Government to share the details of this package as quickly as possible, in order to provide support for workers of all ages.
“We still need to see more action from both Government and employers to recognise the value and potential of older workers. At a time where critical skills gaps plague the UK economy, it’s never been more important to support the full workforce, from those just starting out on their career through to those aged 50 and over. We need to see better use of the apprenticeship system to support older workers, as well as solutions such as ‘skills bridges’ to help people update their skills and move into sectors with high demand.”