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CIPD says Government must raise ambition on skills to tackle productivity

Ian Brinkley, acting chief economist for the CIPD, the professional body for HR and people development, commented on yesterday’s Budget

On the apprenticeship levy:

“Investments in physical and digital infrastructure are welcome but the battle for UK productivity will be won or lost in the workplace. The skills agenda is central to this and we need to see much greater ambition from the Government. It’s promising to see that the Government has halved the apprenticeship levy contribution for smaller businesses but this is unlikely to greatly boost the number of apprenticeships offered by small firms, many of which lack the capacity to take on apprentices. The levy is still far too rigid to work in practice for many employers. We need a more flexible training levy that can help organisations fulfil a number of training and development needs rather than shoe-horning funds and efforts into the apprenticeships model alone. 

It’s vital that the Government continues to review the operation of the levy to ensure it delivers the right results for all businesses and individuals, and that it can meaningfully help address the UK’s productivity challenge. The other big issue on skills is the need to provide small businesses with much more locally provided support on developing people management capability to boost both job quality and firm performance. 

On IR35:

“It is disappointing the Chancellor has decided to push ahead with extending the IR 35 tax reforms from the public sector to the private sector as this will result in significant additional red tape for employers and runs contrary to his stated intention of boosting enterprise in the UK. However we are pleased that the government has taken on board the need to phase in these changes from April 2020. What is also crucial in the run up to implementation of this tax reform will be the provision of good quality advice and guidance for employers from HMRC, with nine out of ten HR and payroll practitioners surveyed by CIPD saying they would need significant support to correctly determine employment status if these changes are introduced.” 

Original article link: https://www.cipd.co.uk/about/media/press/291018-budget-2018

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