The budget from Chancellor John Healey has certainly not brought any huge changes, positive or negative, for the country’s workplaces. Indeed, the lack of a significant shift has attracted some criticism in itself.
Movement on the NEET question and therefore perhaps a clearer steer on skills and development within the workforce will still have to wait until the final report from the Milburn Review. However, from The HR World’s expert panel leaders and beyond there are some aspects of Healey’s measures that deserve consideration, and even praise.
AI and tech boost
“Hundreds of millions are being poured into national security and cyber defence. Data is coming home, and AI entrepreneurship is getting a major boost,” comments Jamie Thomson, Ai & Technology, Expert Panelist for The HR World, Principal Consultant at MindfulDigital.online and Founder of QuikAuthor.io.
Thomson believes recent events have caused Labour to push AI sovereignty to the front of the funding queue and says The British Data Centre Covenant should lead to major infrastructure investment and significant job creation.
“The £500m safety and security package - anchored by the National Cyber Shield, the NERV Centre, and the National AI Biosecurity Initiative - should help us all sleep a little better in the future,” he says.
Elsewhere, Thomson notes there was also a real boost for domestic innovation with £140m carved out for the Sovereign AI Unit, £60m for sovereign AI R&D procurement, £120m for the AI Security Institute (AISI), and £18m for Edinburgh’s Advanced Chip Design Academy. An additional, £45m is designated for regional AI partnerships and challenge prizes.
“Labour is also investing in workforce research, assigning £10m to labour impact research and £23m over three years to the AI Economics Institute to study productivity gains, wage distribution, and macroeconomic impacts,” says Thomson.
However, he also notes the budget didn’t bring much for medium to large enterprise tech firms, but he says, the investment in data sovereignty, homegrown innovation, and meaningful research seems like a fair compromise. The only caveat Thomson put to this was the hope that the money would go into action soon.
Little for employment market
“The aim of this budget was clearly to play it safe,” comments Chris Bleakley, Director of Resourcing at Spire Healthcare and The HR World’s Expert Panelist for Talent and Recruitment. “However, it was also a budget that offered very little in terms of boosting the employment market.”
Bleakley notes there was nothing that increased the cost of employment but also nothing to help either. In addition he thought that since the real focus is supposed to be on jobs for the younger generation the budget wouldn’t create or increase the entry level opportunities they need.
“Vacancies in the UK have fallen again in the last 12 months which means we’re back to 2021 numbers – and its small businesses in particular that are holding back,” he noted. “That said a combination of cost and AI is also making bigger companies re-think their strategy. Wider investment is good but the job market prospects are less clear.”
Elsewhere, Neil Carberry, Chief Executive of the CIPD, the professional body for HR and people development, thought employers would be pleased that there were no big, unwelcome surprises suggesting this in itself might underpin confidence in the economy. However, he added “There is much more to do to get the economy firing in a way that will help close the fiscal gap.”
Carberry also notes the Chancellor’s support for employers and entrepreneurship but also added: “Many organisations are still recovering from a wall of Government-imposed costs they have had to absorb – or will have to in the next few months.”
Joined up approach
Calling for a more joined up approach Carberry added: “The intentions outlined in this Budget also highlight the very real tensions at the heart of the Government's growth strategy. Policies on skills, AI and other job measures are seen in isolation and unrelated to decisions on employment taxes and regulation which too often pull in the opposite direction.
“We need the government to do the hard work and join the dots on some of the most pressing issues facing employers today. Without a joined-up approach, any measures announced today, will struggle to have the impact Government wants, and that employers and individuals need.”
On specific measures Carberry praised the £100m expansion of the Mayoral apprenticeship brokerage programme as a positive step to boost young people’s job prospects. “For employers, the decision to pause equalising the youth minimum wage with the adult rate will bring some relief to organisations already struggling with rising costs and could help protect hiring for young people,” he said. “We look forward to further work in this area once the Milburn review reports later this year, and welcome the Chancellor’s commitment to swift action. A coherent plan on this vital issue is essential. Funding to understand how AI will reshape jobs and industry also stands to be vital if organisations are to use AI safely and productively.”
