CIPD responds to the Chancellor’s summer statement

The professional body for HR and people development recognises the significant investments announced by Rishi Sunak in his Plan for Jobs, but warns a lack of targeting may make job retention and other measures less effective.

Chefs working in kitchen
In a summer statement trailed by the Prime Minister last week as one that would build social inclusion alongside the UK’s infrastructure and economy, Chancellor Rishi Sunak yesterday unveiled a multi-billion-pound package of rescue measures designed to “support people to find jobs, create and protect jobs”.Among them were: a £1,000 bonus per employee to companies who continued to employ furloughed workers until January; a kickstart scheme to directly pay employers £1,000 for every job it creates for any 16-to-24-year-old at risk of long-term unemployment; £2,000 for every apprentice hired; and a £100 million fund to create places on skills training courses.

Protecting jobs from redundancy

A key aspect of Mr Sunak’s budget was the announcement of incentives for employers to return furloughed workers to their jobs.However, with high-street retailers and the hospitality sector already warning of or already making large-scale redundancies and restructuring - as well as being impacted by immigration changes and Brexit - Mr Cheese says the £1,000 bonus is unlikely to “provide sufficient incentive to encourage employers to bring workers back from furlough beyond those they would be planning to bring anyway.”The CIPD believes a better use of public funds would be to extend the Job Retention Scheme beyond October.The CBI also expressed doubts on the efficacy of the job retention bonus. Carolyn Fairbairn, the business representative body’s Director-General warned: “Many viable firms are facing maximum jeopardy right now. The job retention bonus will help firms protect jobs. But with nearly 70% of firms running low on cash, and three in four reporting lack of demand, more immediate direct support for firms, from grants to further business rates relief, is still urgently needed.”

Employer engagement critical for delivering measures effectively

Responding to the details of specific measures for young people in the summer statement, Peter Cheese, Chief Executive at the CIPD, welcomed the focus. However, he warned that getting employers fully onboard to ensure take-up and quality jobs will be vital if the kickstart scheme is to be effective.  “The £2bn kickstart fund is a bold measure to help get young people into work, but employer engagement will prove critical,’ said Mr Cheese. “Similar schemes in the past have floundered as employer pick up was low or largely limited to low-paid opportunities in the public or charitable sectors. This scheme may face similar difficulties if it fails to engage with the private sector, especially at a local level.” 

Supporting life-long learning

Announcing his Plan for Jobs, Mr Sunak urged “every employer, big or small, national or local, to hire as many kickstarters as possible.”With skills again firmly in the spotlight as technology threatens to replace jobs after the Covid-induced recession, Mr Cheese says “the government needs to do much more on support and investment in life-long learning if it is serious about helping people re-skill and upskill to find work as we go through this period of significant change.”“There also needs to be strong support to help young people prepare for what happens after the scheme is finished as it is not an automatic free-pass to a permanent role in six months’ time.“The pledge to double the number of work coaches will help to a point but this support will only go so far if people cannot access training and development opportunities as well. “Efforts to incentivise employers to invest in new apprenticeships are welcome. However, to ensure the best use of public funds we believe that these should have been more tightly focused and more generous: aimed at boosting apprenticeship take up among SMEs, where uptake has historically been low, and focused on opportunities for young people.”  

A plan for all jobs?

Other representative bodies also commented on the Chancellor’s plan, including those who felt their interests were not represented. Andy Chamberlain, Director of Policy at IPSE, the Association of Independent Professionals and the Self-Employed, said: “Although there were many positive measures to boost the economy in the Chancellor’s statement today, the self-employed were noticeable by their absence.”With IPSE representing one in seven workers in the UK today, it warns that “some freelancers relying on the Self-Employment Income Support Scheme (SEISS) may benefit from the sectoral support announced today, but many more will not.“We urge the Chancellor to introduce a tapered end to SEISS to address the clear imbalance between employees and the self-employed. Freelancers will be vital in getting the UK back to business, but if they are to play their part, they must get a fair deal and the backing they need from the government.”

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