Improved childcare for working parents and ambitious return-to-work initiatives were among the HR takeaways from the Chancellor’s Spring Budget.
Jeremy Hunt outlined his fiscal plans for the nation in Parliament on Wednesday, March 15, with a heavy focus on reducing ‘economic inactivity’.
As part of his dispatch, Hunt outlined some major plans which will have a significant impact on employees and employers alike, including:
Free childcare of 30 hours a week for working parents is being expanded to cover children from the age of nine months
Funding will be provided for up to 50,000 places on new voluntary employment scheme for disabled people
A ‘Returnership’ scheme aimed at encouraging more over-50s back into the workforce.
Below, HR and employment experts share their reactions to some of the most significant HR-centric points from the budget announcement.
‘Encouraging for employers’
Simon Winfield, Managing Director of Hays UK and Ireland, said some of the Chancellor’s announcement would be encouraging for employers across a range of industries who are struggling to access the skills they need.
Winfield commented: “The examples of re-training opportunities and ‘returnerships’ for the over 50’s are important; however, it’s not just about tempting older workers back into employment. It’s also about educating employers to have conversations about re-skilling, part-time working, and career opportunities when workers reach a certain age.
“Flexibility is key and the government alongside employers need to be realistic to support later life working and prevent early exit from the workforce – where the transference of skills may be missed between young and older workers. We’re already seeing progress on this but there’s plenty of room for improvement. In data from our 2023 Salary Guide, close to a fifth (19%) of employers said they are now actively hiring those over the age of 50 to address skills shortages.
“Similarly for working parents, measures to support the cost of childcare will hopefully encourage more professionals to return to work with the right support available.
“The steps announced today are positive, especially with regards to those who are economically unactive due to long-term sickness, disability, or ill health. However, there are still large proportions of the population who struggle to access work and need support in doing so such as ex-service leavers, neurodivergent professionals and caregivers. Not only does hiring from outside your usual talent pool make good business sense, but it’s more importantly allowing those who might need certain tweaks to the application process, or access to part-time work a chance to thrive in a skills short labour market.”
With more than 1 million cacancies in the job market, there is clearly a need to keep older workers at work, or attract them back. Jeremy Hunt's decision to raise the tax free pension allowance will help retain older staff who want work to pay.
Hunt unveiled new skills courses, dubbed ‘returnerships’, which will focus on boosting the over-50s chance of finding work.
Of this plan, Anthony Painter, the Chartered Management Institute’s (CMI) Policy Director, said: “Supporting over-50s back to work, where possible, will be critical to plugging our chronic skills gap, returning to pre-pandemic employment levels, and building an economy which works for all generations. The ‘returnships’ are an important first step.”
He added: “The success of the approach will rely on managers changing their attitudes toward hiring older workers. Our research shows that just four out of 10 (41%) of managers are open to hiring people aged between 50 and 64 ‘to a large extent.’ We need businesses to shake off this stigma and embrace the opportunity to bring in a new wealth of talent.
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“So the CMI is calling on the UK Government to introduce a ‘Help to Hire’ initiative to help small businesses recruit over-50s. Similar to the Government’s existing Help to Grow: Management scheme, the programme would subsidise leaders in small firms to undertake an intensive course covering everything from adopting digital technology to sourcing new potential markets. A ‘Help to Hire’ scheme would complement the newly-announced returnships for older workers.”
Kerry Linley, founder and CEO at apprenticeship software company Rubitek, said that whilst the introduction of this new over 50s scheme programme sounds broadly positive, the immediate question was "how it will work in practice.”
Linley explained: “Functionality of the existing apprenticeship levy is already problematic, and its absence in the Budget announcement proves the government is yet to find a solution to problems surrounding it. For example, recent news of the levy being used to fund MBAs for high-earning executives raises an eyebrow as to whether Returnerships will fuel more of this kind of behaviour instead of bringing over-50s back into work.”
“Whilst the new scheme may be a boost to employers, who can now choose between upskilling young as well as “experienced” talent, there is a concern that young people could miss out. The purpose of apprenticeships has always been to equip young people with new skills, and it’s vital we do not lose sight of that.”
Childcare expanded to get more parents working
The Chancellor also spoke about the issue of high childcare costs preventing many parents from returning to the workforce. To combat this, Hunt said working parents with children over nine months old would be entitled to 30 hours of free childcare a week by September 2025, expanding the existing scheme which currently applies to three-and four-year-olds.
Gemma McCall, CEO and co-founder of Culture Shift, said: “The expansion of childcare support is a welcome announcement for any parent with young children to hear, especially in the current cost of living crisis where some families are having to make difficult decisions on how they put food on the table.
“On top of this, making childcare more accessible is vital because too often parents have to make do with balancing their career commitments with their childcare needs. But making do is archaic, especially for women who want to have the opportunity to develop in their careers.
“Too often the assumption is made that because someone has become a parent, they are no longer as committed to their career. To see real impact from this announcement, cutting the cost of childcare has to come hand in hand with the recognition that every situation is different and we cannot jump to conclusions about how people feel about their workplace following becoming a parent. Otherwise, we will miss out on the valuable knowledge and insights parents have to offer.”
Long-term illness, disability and mental health support
McCall also reacted to the announcement of increased support for those with long-term health conditions in work, saying: “Extra support to remove the barriers people living with long term illness face cannot come soon enough. Everyone, no matter their background or their ability, has something to offer and long-term illnesses in themselves can be debilitating enough without workplaces creating unnecessary obstacles.
“While businesses may not feel they are discriminating, by not making the required provisions, they are limiting the opportunities for some of their employees and consequently losing out on the vital contributions they would otherwise be able to benefit from.
“Earlier this month, International Women’s Day embraced equity. If the government and business owners are serious about this message, they have to practice what they preach. It is not enough just to acknowledge it on awareness days, appropriate support must be put in place and above all we must listen to the individuals experiencing long term illness to ensure it is the right support for them as no two circumstances are ever the same.”
Occupational health boosts for mental health and musculoskeletal issues were also outlined by the Chancellor.
Hannah Copeland, HR Business Partner at employment law and HR consultancy firm, WorkNest, said: "Mental health and musculoskeletal matters remain top of the list for the majority of our clients in terms of the leading cause of long and short term absence. Additional support in this area can never be enough and will not supplement the health care provisions often provided by employers who can afford them however, its positive that the need for investment in these areas is recognised and will be vital to getting employees back to work in times where some very complex health challenges are preventing skilled employees from prospering at work. The impact will most likely benefit the smaller employers."