UK Staffing Industry Reacts to Spring Budget 2024

The UK staffing industry has responded to Chancellor Jeremy Hunt’s Spring Budget 2024, which was announced on March 6. The budget addresses several key areas, including NHS agency staffing, AI skill development, and National Insurance adjustments, aiming to stimulate investment and drive growth.

In a significant move, the Chancellor outlined plans to reduce NHS agency staffing costs by ending the use of expensive “off-framework” agencies by July 2024. This initiative is part of a broader NHS productivity plan that includes reviewing agency price caps, tightening staffing controls, and enhancing support and transparency. Additionally, the plan proposes a £3.4 billion capital investment to improve NHS productivity through advancements in AI, digital, and other technologies, aiming for a 2% annual productivity increase by 2028/29.

The budget also introduced a new £7.4 million pilot fund to assist SMEs in developing future AI skills, complementing the forthcoming SME Digital Adoption Taskforce and the AI Opportunity Forum. These efforts seek to boost private sector productivity and innovation through enhanced AI adoption.

Furthermore, Chancellor Hunt announced significant National Insurance cuts, reducing the main employee rate from 10% to 8% and the self-employed main rate from 9% to 6% starting April 6, 2024. These cuts are intended to save workers and self-employed individuals hundreds of pounds annually while promoting workforce participation.

The Recruitment and Employment Confederation (REC) and the Association of Professional Staffing Companies (APSCo) provided mixed reactions to the budget. While acknowledging the positive steps towards AI skills development and small business growth, they expressed concerns over the absence of a comprehensive industrial and workforce strategy. REC CEO Neil Carberry criticised the unrealistic timeline for eliminating off-framework agency staffing and emphasised the need for a true partnership between agencies and the NHS.

APSCo’s Global Public Policy Director, Tania Bowers, highlighted the budget’s lack of focus on workforce and skills and expressed worries about an overreliance on consultancies for NHS IT system modernisation. She also pointed out the missed opportunity to address the highly skilled contract workforce’s needs and the lack of a flexible short-term visa scheme.

Professional Passport CEO Crawford Temple voiced frustrations over the government’s slow response to non-compliance in the umbrella company market, urging for more decisive enforcement actions against tax avoidance schemes.

Overall, the UK staffing industry acknowledges the budget’s positive initiatives but calls for a more comprehensive approach to address the sector’s broader challenges, including workforce strategy, skills development, and regulatory compliance.