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Furlough extension will provide a lifeline for businesses, but greater skills support needed to boost recovery, says the CIPD

The CIPD responds to the Chancellor's 2021 Budget

The CIPD has welcomed the extension to the furlough scheme, saying it represents a lifeline to many businesses and workers. However, it warns the Government must now start to shift gears and move from its focus from job protection to greater investment in skills and supporting jobseekers.

Peter Cheese, chief executive of the CIPD, the professional body for HR and people development, said:

On the furlough scheme and missed opportunities on skills:  

“The extension of furlough to the end of September will be a huge relief to businesses and workers across the UK, while gradual tapering of the wage subsidy from July will help avoid a ‘cliff edge’ end to support and protect thousands of jobs. 

“However, while the furlough scheme will continue to support jobs over the summer there is still a huge challenge to address the reskilling needs of the new economy and to help jobseekers back into work. 

“These announcements on skill investment and policy lack ambition and don’t meet the needs of businesses or workers. Spending on lifelong learning is still less than it was a decade ago at a time when investment in this area has never been more important. This must be addressed if the Government’s further education reforms are to meaningfully tackle the skills gaps and shortages that hold back the economy. There also needs to be much more sector-specific funded training and mentoring support to help job seekers develop the technical and employability skills they need to find work in parts of the economy that are set to grow.” 

On traineeships and apprenticeships support:   

“Taken together, the announcements on skills are underwhelming and undermined by the continued failure to reform the Apprenticeship Levy into a more flexible training levy which would have the most positive impact on employer skills investment.   

“We welcome the plan to boost the number of traineeships with the caveat that they need to be marketed much better to employers, as awareness of them is extremely low, and there needs to be a focus on quality provision not just numbers. The proposal for new “flexi-job” apprenticeships is also a positive step, particularly at a time when apprenticeships opportunities are limited.    

“However, the increase in cash incentives for firms to take on apprentices is still not sufficient, and based on evidence from previous schemes, these should also be targeted at small firms and on apprenticeships for young people in particular." 

On the Help to Grow fund:  

“The Help to Grow initiative represents a welcome recognition that improved support for SMEs to help them invest more in new technology and improve management capability is critical to UK productivity growth. However, it is important that lessons are learned from previous business support programmes which show that effective marketing through trusted networks, particularly at a local level will be key to effective uptake. It is also crucial that the training offered goes beyond business areas like marketing and financial management to also include people management skills. Analysis of ONS management practices data clearly shows that it’s people management practices that are most correlated with positive firm-level productivity.” 

Budget 2021: What you need to know

Original article link: https://www.cipd.co.uk/about/media/press/030321budget-response

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