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Chancellor’s party conference speech: What does it mean for employers?

5 Oct 2021 By Caitlin Powell

The government is extending its Plan for Jobs and improving opportunities around AI, but there was no mention of support for older workers

Yesterday, the chancellor Rishi Sunak addressed the Conservative Party Conference in Manchester, the first time he has done so in person since taking charge of the Treasury in 2020.

As part of the government’s ‘Build back better’ campaign to restart the economy after coronavirus, Sunak made new announcements about his Plan for Jobs, alongside initiatives to boost the uptake of apprenticeships and the use of artificial intelligence (AI). The “only sustainable route out of poverty comes from having a good job”, he said.

However, experts noted several things were omitted by Sunak in his speech. The chancellor made no mention of a £500m support fund that was announced over the weekend, nor did he address the disparities between younger and older workers. 

People Management spoke to employment experts about what was and wasn’t covered, and the ramifications for employers.

The Plan for Jobs will be extended...

Sunak announced that the government is expanding its ‘Plan for Jobs’ into 2022. 

“The Kickstart scheme, extra support through the Youth Offer, the Job Entry Targeted Support [JETS] scheme, and our Apprenticeship Incentives: all extended,” he stated. 

… as will the Kickstart scheme for young people

Sunak signalled that the Kickstart scheme would be one of the initiatives expanded into next year, hailing the scheme as a “landmark programme that is helping young people start exciting new careers”.

This was broadly welcomed by businesses. Shevaun Haviland, director general of the British Chambers of Commerce (BCC), said that employers have created thousands of Kickstart jobs to help “young people furthest from the labour market gain skills for work”. 

But, Haviland added, “it would make more sense to extend the scheme further, to the end of 2022, and broaden the eligibility criteria to ensure more young people can benefit from the scheme”.

She also suggested that the government extend the Kickstart scheme to include older workers, “to provide new experience, skills and confidence to rejoin the workforce”.

Neil Carberry, chief executive of the Recruitment and Employment Confederation (REC), agreed it was good news that pandemic support schemes including JETS will be extended. 

“However, the Kickstart scheme has only helped a limited number of people so far, and even with the extension, it will still expire in early 2022,” he warned, adding that the government should work in collaboration with industry experts in a joint forum to solve labour market issues.

… and apprenticeship incentives

Sunak did not say much about apprenticeships, other than the incentives introduced during the pandemic would also be extended. This news was generally welcomed, but Alan Price, CEO of BrightHR, warned that “the complexity of navigating this support, and making sure everything is correctly in place, will be an additional burden to employers who may not have previously accessed schemes of this nature”.

There will be additional opportunities around AI technology

Sunak also announced that the government will create 2,000 AI scholarships for disadvantaged young people and double the number of Turing AI World-Leading Research Fellows, “to ensure that the most exciting industries and opportunities are open to all parts of our society”. 

Haviland welcomed the increased investment in training for developing industries involving AI and innovative technologies. “These skills will support employers in key sectors of our economy going forward,” she said. 

But no targeted support for older workers...

Kirstie Donnelly, CEO at City & Guilds Group, said that while the announcements to extend the Kickstart scheme and introduce an AI scholarship plan are positive for the economy, they are tailored towards supporting young people. 

“It is disappointing that the anticipated £500m support package for displaced workers [announced over the weekend], including support for older workers, was not mentioned in the chancellor’s speech,” she explained. 

Donnelly highlighted that “it’s never been more important to support the full workforce, from those just starting out on their career through to those aged 50 and over”. 

She advised that there needs to be better use of the apprenticeship system to support older workers, as well as solutions such as ‘skills bridges’ to help people update skills and move into sectors with high demand. 

...and no plan to address labour shortages

Ben Willmott, head of public policy at CIPD, welcomed the extra support for apprentice incentives and the Kickstart scheme but said Sunak “left a large question mark” over how the government plans to help the UK transition to a high-wage, high-skill economy and reduce the need for immigration to address rising skill and labour shortages.

“Greater investment in R&D, infrastructure and in high-tech industries is part of the answer,” Willmott said, but added this needs to be supported by wider adoption of technology by employers supported by improvements in management capability and workforce skills development.

He also suggested the government builds on its ‘Plan for Growth’, a long-term strategy to support business productivity improvement at a regional, sectoral and national level.

Paul Martin, managing director of Croner, added that Sunak’s extension of support “recognises that the significant number of vacancies is in part created by an absence of relevant skills”. 

As a result, he suggested firms take advantage of these schemes to train new staff up to the standards they need, to make the most of them. 

“That no mention of the £500m support fund for low-income families was made was only a little surprising,” he told People Management, because “this safety net is to support those in most need, to put them in a position to focus on accessing work and supporting themselves”.

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