Spring Budget 2023 was delivered by Chancellor Hunt on Wednesday, he mostly delivered news of the getting Britain “back into work” campaign. The reforms are aimed at supporting those who are economically inactive or out of the labour market. The Chancellor is hoping his policy changes will help fill the 1,000,00 job vacancies in the UK, from the pool of 7,000,000 working-age adults who are not currently in employment. We’ll now outline the key changes for employers from Spring Budget 2023.
Key Changes For Employers from Spring Budget 2023
1. Increasing occupational health support
The government will expand a scheme to support SMEs in England with the cost of purchasing occupational health services. The plan will invest £406,000,000 to “tackle” health issues keeping people out of work. It will focus on mental health, musculoskeletal conditions and cardiovascular disease.
“In focus groups, out-of-work over 50’s told us they had left the workforce for health-related reasons, but would have liked help to continue to work,” said Andrew Phillips, senior researcher at Demos.
2. Increased employee protections
There were a number of increased employee rights and protections announced. The government is supporting bills that provide a right to request flexible working from day one of employment. There will also be enhanced entitlements for protecting pregnant women from redundancy, family leave, carers’ leave, and neonatal care leave.
3. Apprenticeships for over 50’s
In a bid to entice over 50’s back into work, the government will launch a new type of apprenticeship called “Returnerships”. They will refine existing skills interventions to this age group and will focus on flexibility and previous experience, thereby decreasing the lengh of training. They will be offered alongside an additional 8,000 ‘Skills Bootcamps’ and 40,000 new ‘Sector-Based Work Academy Programmes’.
“No country can survive if it turns its back on the wealth of talent and ability. I want to make it easier for those who wish to – to work longer,” the Chancellor stated.
“Employers should also recognise that the wants and needs of over 50’s may vary from younger workers, so put measures in place to directly meet their expectations,” said Alan Price, chief executive of BrightHR.
4. Changes to pensions tax
Pensions tax will be lowered to prevent highly skilled workers leaving employment for tax reasons. The pensions tax-free annual allowance will increase from £40,000 to £60,000.
Additionally, the lifetime allowance charge will be removed before being abolished altogether. Hunt is hoping this will encourage more employees to stay in work.
Katharine Moxham, spokesperson for Group Risk Development, said the government has “reduced the temptation to retire early” with this move. “The decision to abolish the lifetime allowance also positively impacts on group life assurance schemes, which are employer-sponsored death benefits provided to employees,” she said.
“Lump-sum death benefits, when combined with the value of any registered pensions, can normally be paid tax free, but only up to the lifetime allowance, so removal of this restriction will be very welcome for employers and employees alike. This will also save employers significant administration costs.”
5. More help for working parents
Hunt stated “today’s childcare reforms will increase the availability of childcare, reduce costs and increase the number of parents able to use it…But, if we really want to remove the barriers to work we need to go further.”
The 30 hours free childcare scheme will extend to every child over the age of nine months with working parents. It will be introduced in phases:
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April 2024: 15 hours of free childcare for working parents of two-year-olds
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September 2024: 15 hours of free childcare for working parents of children aged nine months to three years
Schools and local authorities will be given funding to increase wraparound care, helping parents of school-age children.
“This is a positive change for the careers and work-life balance of millions of parents, but if this change goes ahead nurseries and the Home Office will have to take the additional compliance, visa and work burden into account,” said Nerys Ireland, Legal Director in Employment and Immigration at Eversheds Sutherland.
Nuseries and preschools are already suffering a skills shortage so they may have to reply on migrant workers to fill the vacant jobs in the future.
6. ‘Universal support’ scheme to help disabled into work
The Chancellor sees new working practices such as remote working with the help of Zoom and Teams as the perfect time to support people with disabilities and long-term sickness back into employment.
Hunt is hoping the scheme called ‘Univeral Support’ will help 50,000 potential workers per year into work. The government will invest £4,000 per person with this voluntary employment scheme for disabled people and those with health conditions.
Additionally the Chancellor stated that reforms to the welfare system, such as abolishing the work capability assessment, would help claimants back into employment “without fear” of losing their financial support.
Alan Price, chief executive of BrightHR, said “While reasonable adjustments should be tailored to each individual, employers can implement common adjustments that will benefit a majority, as well as utilise positive action tools to proactively appeal to these people.”
Do you think this raft of policy changes will help increase the pool of potential candidates to help plug the 1,000,000 unfilled job vacancies in the UK? Let us know what you think of the key changes for employers from Spring Budget 2023.
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