Autumn Budget Statement – what recruiters need to know
With measures affecting apprenticeships, umbrella organisations, and investment in the NHS and UK’s infrastructure, this year’s Autumn Statement is significant for the recruitment industry.
This is all set against a backdrop of higher-than-expected economic growth and a record employment rate.
Presenting the statement in the House of Commons today [3 December], Chancellor George Osborne announced the Office of Budget and Responsibility’s (OBR’s) revised forecast for UK growth in 2014 from 2.7% to 3%, and 2.3% to 2.4% in 2015.
He also said that employment has reached 30.8m – 1m above its pre-recession peak. With an employment rate of 73%, the UK has seen the fastest increase in employment than any other country in the G7.
In his speech Osborne said: “While employment is at a record high, we must never give up on the task of finding work for all young people. So today we move further towards full employment by supporting the businesses that create jobs and apprenticeships.
“For decades our economy has been too unbalanced, so we do more now to build the Northern Powerhouse. And today we back aspiration – the aspiration to save, to work and to own your own home.”
What recruiters need to know:
Employers who take on apprentice under 25 will not have to pay National Insurance Contributions (NICs). This is in addition to measures introduced last year that mean employers won’t have to pay NICs on under 21s from April 2015.
The government will review the increasing use of overarching contracts of employment intermediaries such as ‘umbrella companies’. These arrangements enable workers to obtain tax relief for home-to-work travel that would not ordinarily be available. The government will publish a discussion paper shortly to inform possible action at the Budget.
- The government will make a minor amendment to correct legislation underpinning the penalty regime for the late filing or non-submission of quarterly returns from employment intermediaries. This will take effect from 6 April 2015.
Funding support for SMEs
There will be a further £400m to support venture capital through the British Business Bank’s Enterprise Capital Funds programme. This enhanced funding will ensure the programme can continue into the next Parliament and will enable the funds to make larger investments in small businesses with growth potential. Further funding has been given to the Enterprise Finance Guarantee scheme, facilitating up to £500m of new lending to small businesses.
Investment in the NHS
The government is providing £2bn of additional funding for frontline NHS services in England 2015-16. This is part of a multi-year £3.1bn UK-wide investment in the NHS. And £1bn, which has come from fines collected by the Financial Conduct Authority from five banks for failures in foreign exchange trading, will be used to fund advanced care in GP practices over four years.
Other investment likely to lead to job creation
- The government will make a £5.9bn sustained investment in science, which includes £95m to take a leading role in the next European mission to Mars.
- Investment in infrastructure includes £15bn on roads, nearly £6bn for local road improvements and over £2.3bn towards more than 1,400 flooding and coastal erosion protection schemes.