25 Jan 2024
by Tania Bowers

Government must move away from its entrenched position on skills

With talk of two fiscal events in 2024 and with all political parties finalising their manifestos ahead of an election, now is the time to impact policy for growth. 

APSCo UK and OutSource made their Spring Budget Submission this week to Chancellor Jeremy Hunt. With so many fiscal challenges, such as raising capital expenditure on deteriorating public sector infrastructure, the Chancellor (and any future government) need policies that will positively impact growth without massive expenditure. 

Last week I heard thoughts and statistics from Lee Cain, Boris Johnson’s former head of communications and Darren Yaxley director of YouGov, at the CBI. Both were confident of a resounding victory for Labour later in the year, no talk of a coalition or a confidence and supply agreement; and they doubt Reform will achieve what pollsters are currently suggesting.  

Relevant to everyone using highly skilled contractors in the labour market, we are proposing a change to the Agency Workers Regulations (AWR), that will reduce Brexit red tape and make hiring easier for UK plc. Many tens of thousands of highly paid contractors are within AWR on payroll. A simple change to exclude independent workers on rates above a set multiple of the NMW will help make hiring cheaper and faster for businesses. 

With YouGov in its B2B Omnibus for January 2024 reporting that 33% of business leaders say labour market and skills investment is one of their top two priorities, then our asks on apprenticeship reform and regional skills investment must surely finally resonate with the Chancellor. Our members operate in high skilled, high-compliance sectors such as engineering and clinical healthcare, and many have huge unspent levy pots. 

Why can’t that money be released to keep agency workers’ training up to date or to pay for returners’ training, in jobs desperately needed in the NHS such as physiotherapists, and mental health nursing? Alternatively, used to run modular agency worker apprenticeships in engineering and technology, numbers in which Engineering UK report has declined over the last 5 years.

Dovetailing apprenticeship levy rescoping is needed to recognise that the Tier 2 skilled visa is not a one-size-fits-all all solution. By allowing recruiters to sponsor and “hire on” for set periods desperately needed skilled workers in technology and renewables, or by permitting paid independent work on a Business Visitor visa, the government could immediately reduce the pressure on vacancies, whilst retaining immigration control.   

Economic instability and achieving growth are the two issues YouGov report that business leaders are most concerned about. So perhaps with business leaders reporting that they would trust Labour more on managing the economy and understanding UK business than the Conservatives it is time for the governing party to move away from their entrenched position on skills. 

You can read APSCo’s Spring Budget submission in full here.