Reactions to the spring budget

15 March 2023

Chancellor Jeremy Hunt announced his spring budget today, and as expected, it was a fairly reserved affair...

“Growth” was a key focus of the spring budget; although the proposed rise in corporation tax from 19% to 25% went ahead, it was offset by a new multibillion-pound capital allowance regime under which companies can write off qualifying expenditures against taxable profits.

One factor that’s put the brakes on the economy’s ability to grow is the ongoing labour crisis. With staff shortages across every sector, the spring budget contained a raft of plans to get more people into work. 435,000 people in the UK (primarily women) are currently unable to work due to caring responsibilities; the spring budget contains provisions to offer 30 hours of free childcare a week to eligible parents of children under the age of three. The scheme will be rolled out in phases from April 2024.

"Gamechanger"

Writing on Linkedin, business consultant Nicola Pease was among those to describe this as a “gamechanger.” She said: “So many women face the impossible question at the end of mat leave “can I afford to go back to work? And the impact that has on women’s careers, the gender pay gap and societal norms about the role of women cannot be underestimated. Working mums want to work. We want to contribute. We want to continue to progress our careers. And this, this is how we can achieve that! (Well, it’s at least a huge step forward).”

The government also announced a series of measures aimed at getting over-50s who’ve stepped back from the workplace to rejoin the labour force, including introducing a form of apprenticeship called a “returnership” that will operate alongside work skills boot camps and sector-based work academies. 3.5 million over-50s in the UK are currently “economically inactive”, a rise of 320,000 since before the pandemic, according to reporting by iNews.

But while the government’s plan to bring back early retirees may help with labour shortages, some FM experts believe more needs to be done to future-proof the industry. Jasmine Hudson, Chief People Officer at Mitie – which employs 68,000 colleagues in the UK, two thirds of which are over the age of 50 - said: “We welcome the Government’s new measures to support and encourage more people back into work. As a people business welcoming colleagues from all stages of life, we know our diversity makes us stronger. But we must address the long-term skills challenge to secure the future of Britain. Industries, such as electric vehicles, green energy and connectivity, cannot rely solely on the skills of an older workforce. We also need to attract new generations.

She continued: “Education and employment must go hand in hand. To achieve Britain’s ambition for sustainable economic growth, it is vital we continue to invest in nurturing new skills by helping more people of all ages access quality apprenticeships. More must be done to accelerate the launch of dedicated courses which support the growth of our green economy and deliver on Britain’s Net Zero and Levelling Up agendas.”

"Underwhelming"

David Crosthwaite, Head of Consultancy Services at the Building Cost Information Service (BCIS), described Hunt’s plans as an “underwhelming Spring Budget, that lacks a clear industrial strategy to encourage construction investment and stimulate economic growth.” He too felt that the measures to encourage over-50s back into work are not likely to have a significant impact on the labour shortages, and would have preferred a focus on apprenticeships, stating: “The announcement of measures to boost the number of Ukrainians entering the labour market and returnerships, targeted at the over 50s – will do little to replenish construction’s dwindling workforce. We need a more concerted approach that prioritises investment in apprenticeships and training, to tackle ingrained labour shortages.”

There was also some disappointment from the FM sector that the budget didn’t contain any significant measures to boost the green economy. Mark Caskey, Managing Director, Mitie Projects, Mitie, said: “It’s disappointing that net zero initiatives were not prioritised in the Chancellor’s budget statement given the role energy efficiency, solar technology, and EV transition must play in achieving a net zero Britain by 2050.

He added: “There must be a stronger focus on reducing the emissions of our built environment especially for non-domestic buildings which are responsible for nearly 40 million tonnes of the UK’s annual CO2 emissions. Given these make up nearly a fifth of the nation’s overall carbon footprint, it’s clear that the decarbonisation of these buildings needs far greater priority and urgency.”

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