Government and campaigns
The Spending Review is the government's key process for setting budgets for the coming years. It impacts everything from public services like the NHS, education, and transport, to investments in research, energy security, and infrastructure that drive economic growth across the country.
Ahead of the Spending Review's publication later this year, the Treasury invited responses from businesses to feed into their plans. The Recruitment and Employment Confederation (REC) has submitted a detailed response, offering insights into the labour market and highlighting key priorities for the government.
This Spending Review is a pivotal opportunity for the government to lay out a long-term strategy for sustainable economic growth and a modern labour market, and is the first event of this nature since 2021. The REC supports the government's focus on growth, but stresses that businesses must be seen as essential partners. Overburdening businesses with financial constraints will only limit their ability to invest, expand, and create jobs. The government should prioritize long-term prosperity over short-term political or fiscal concerns.
Recent trends in the labour market show that although there was a slight recovery in early 2024, progress has stalled, leading to growing uncertainty for businesses. Confidence is at a crossroads. Without a clear government strategy, businesses will remain hesitant to invest or hire. To restore confidence and encourage growth, the government must implement an ambitious industrial strategy focused on workforce development, infrastructure, access to capital, and tax policy.
A forward-thinking workforce strategy is critical for maintaining high employment levels and economic stability. This should include major investments in skills development, business flexibility, and smart regulation. Temporary and flexible work must be recognized as crucial for workforce participation. The government should also address barriers like childcare costs and transportation issues to strengthen the workforce.
A future-ready workforce strategy must align skills training, immigration policies, and the changing dynamics of the labour market. Strengthening Local Skills Improvement Plans (LSIPs) will help ensure that training programs meet the specific needs of regional economies. Immigration reforms—such as reducing visa costs and updating the Immigration Salary List—are key to attracting skilled workers. A reformed Growth and Skills Levy should also fund short-term training, especially for temporary workers, and encourage collaboration between businesses, government, and training providers to close the skills gap.
The NHS is facing a critical workforce shortage. The REC calls for a government-led working group to improve NHS recruitment transparency, review agency staffing policies, and update outdated rate caps to reflect current market conditions. These actions are vital for building a cost-effective and high-quality NHS workforce.
The REC’s submission to the Spending Review highlights the urgent need for strategic investments in workforce development, flexibility, and public sector hiring to drive sustainable economic growth. To read the full submission, click here
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