Spring Budget 2017: Employment, education and apprenticeships

By SME Insurance

Posted 31/03/17

On 8 March 2017, Chancellor Phillip Hammond presented his Spring Budget. This article gives a brief overview of the Chancellor’s update and plans across employment, education, and apprenticeships.

Employment Rate is Rising

Updating the House of Commons on the state of employment in the UK, the Chancellor pointed out that unemployment currently stands at 4.8%, an 11 year low – with unemployment falling fastest in Yorkshire, Humber, and Wales.  By corollary the employment rate for the three months to December 2016, stood at a record high 74.6%, the Chancellor explained. [1]

Explaining the trend, Hammond pointed to a higher proportion of women in employment and a rise in full-time employment, which accounted for 72% of employment growth in 2016 [2].  In response, he announced that the national living wage will rise to £7.50 in April 2017, which translates to over £500 more for full-time workers than last year and £1400 than when it was first introduced. [3]

Education Vital to Employment

Moving on to the topic of education, Chancellor Hammond describes his Budget as focusing on creating a highly-skilled workforce – calling this “the next step in the government’s strategy to improve productivity”.[4]

Explaining the focus, he pointed to Brexit.  He explained that, as the UK begins the formal process of exiting the EU, creating a highly-skilled workforce will ensure businesses across the country have the talent and skills needed to succeed in global markets. [5]

Indeed, he said employer demand for skills is increasing – suggesting that, over the coming years, 42% of businesses expect to have more jobs requiring intermediate-level skills, and 74% expect to demand more high-level skills. [6] Employers, meanwhile, suggest this need is not currently being met – the Chancellor said employers consistently cite a lack of skills as a major concern. [7]

Investment in Technical Education and Apprenticeships

With this in mind, the Budget set out a number of measures aiming to address this skills gap. 

For instance the Chancellor announced new fund maintenance loans for students pursuing technical education at higher levels, to open up the same opportunities available to those studying on the academic route. [8]

Meanwhile, pointing out that skills qualifications are clearly linked to higher wage returns, he announced plans to strengthen employment-based technical education, or apprenticeship. [9] In particular, he said, the introduction of an apprenticeship levy in April 2017 will support the delivery of three million apprenticeship starts by 2020. [10]

Sources

[1] http://www.bbc.co.uk/news/live/business-39155802

[2] https://www.gov.uk/government/speeches/spring-budget-2017-philip-hammonds-speech

[3] https://www.gov.uk/government/publications/spring-budget-2017-documents/spring-budget-2017

[4] http://www.bbc.co.uk/news/live/business-39155802

[5] http://www.telegraph.co.uk/business/2017/03/08/spring-budget-speech-full-annotated-guide/

[6] https://www.gov.uk/government/speeches/spring-budget-2017-philip-hammonds-speech

[7] https://www.gov.uk/government/speeches/spring-budget-2017-philip-hammonds-speech

[8] http://www.mirror.co.uk/news/politics/jeremy-corbyn-budget-response-transcript-9990285

[9] https://www.gov.uk/government/publications/spring-budget-2017-documents/spring-budget-2017

[10] https://www.gov.uk/government/publications/spring-budget-2017-documents/spring-budget-2017

Posted 31/03/17

Author: SME Insurance

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