The Chancellor and the Workforce; Remembering the Budget 9 Days On

In his first budget speech, the Chancellor Rishi Sunak put a stake in the ground for government starting to truly understand the value of human capital to the UK economy.

The original Chancellor of the Exchequers budget on 11 March, just before the major further COVID-19 financial rescue measures were announced, now seems like a distant memory. Yet just 9 days ago the UK government put a fresh spotlight on the critical UK workforce, which will need to increase exponentially as the previously constrained UK labour market changes beyond recognition.

In his first budget speech, the Chancellor Rishi Sunak put a stake in the ground for government starting to truly understand the value of human capital to the UK economy. This was welcomed. Understanding the value of the workforce to UK plc in fiscal terms, and therefore how to raise that value with targeted investment, may slowly start to align what is recognised by most senior commentators as a badly disjointed current skills, employment, productivity and industrial strategy policy.  

The Chancellor advised “there is a live global debate about what our low interest rate environment means for fiscal strategy, about the case for fiscal policy to play a more active role in stabilising the economy and about the best ways to measure productivity-enhancing investment in the economy, such as human capital, or measuring value on the public balance sheet. So I want to take time to consider these questions over the coming months so that our fiscal framework allows us to make the right long-term decisions for our economic security and prosperity.”

The plan is to report back in the autumn, and the Office of National Statistics (ONS) has already started to consult of future approaches. Energy & Utility Skills and its Energy & Utilities Skills Partnership has been leading the call for one coherent UK strategy to ensure future labour market resilience and responded to the first part of the ONS study on behalf of the utility sector.  

The Chancellor stated too his view on the transformation of the labour market, explaining “more investment and higher growth mean more jobs and higher wages. We already have more people working in our economy than ever before. Women’s employment is at a record high and since 2010, full time weekly wages have grown faster in every region and nation of the UK than they have in London. The OBR expect half a million more people will be in work by 2025. Wages are expected to grow in real terms in every year of the forecast period. The story of this government has been the story of a national jobs miracle and, Madam Deputy Speaker, given the last few weeks I’ve had, I’m all in favour of jobs miracles.”

A jobs miracle will now be needed more than the Chancellor could possibly have imagined 9 days ago, and whilst talent availability has now increased exponentially due to the heart wrenching damage caused by COVID-19, the recruitment market has immediately collapsed as companies across the UK tighten their belts for the anticipated fiscal damage to come. The UK utility sector is doing all it can through collaboration via the Energy & Utilities Jobs website to signpost impacted workers to gas, power, water, waste management and supply chain careers that ultimately underpin all the essential services to our society. This partnership is supported by a robust and sector wide Inclusion Commitment aimed at opening the doors to ever more diversity of thinking.  

The utility sectors search for high performing talent includes attracting the skilled military and ex-military personnel who have the attitudes, behaviours and competences that so many employers find precious. Last year 24 utility businesses joined together through the Energy & Utilities Skills Partnership to sign the Armed Forces Covenant.

The Chancellor spoke about investment in military veterans, setting out measures to help stimulate more employer engagement, advising “And those extra contributions allow me to take three further steps to support our health services. First, mental health support can be critical for many people – and particularly for our veterans.”…..”I will be supporting veterans’ with mental health needs with a £10m donation to the Armed Forces Covenant Fund Trust and I’m also confirming today that, to encourage employers to offer veterans work, we’ll introduce a new National Insurance relief.”

The utility sector is also right on the front line of delivering the UK’s zero carbon commitments, and whilst – inevitably for now – its efforts are going in to protecting society day to day, in the background the long-term strategies and plans have to press on. The Chancellor advised “There can be no lasting prosperity for our people, if we do not protect our planet. So the fourth part of our Plan for Prosperity is: To create the high skill, high wage, low carbon jobs of the future.”

He concluded “This Budget delivers security today. But it also lays the foundations for prosperity tomorrow. This is just the start. Over the next few months we’ll tackle the big issues head on. From our National Infrastructure Strategy, to social care and further devolution. This is the Budget of a Government that gets things done: Creating jobs. Cutting taxes. Keeping the cost of living low. Investing in our NHS. Investing in our public services. Investing in ideas. Backing business. Protecting our environment. Building roads. Building railways. Building colleges. Building houses. Building our Union.”

Energy & Utility Skills Chief Executive Nick Ellins advised “This first budget speech from the Chancellor offered the first formal recognition from the new government that our nations human capital is pivotal to fiscal policy, and that investment in it can transform our economy. When that speech was made just a few days ago however, few of us could have expected to see such a powerful demonstration of just how strategic human capital planning and maintaining workforce resilience will soon dominate every Board room, every Ministerial and policy meeting and every institutional investors thoughts. Now is the moment to stop treating skills policy across the UK as an education-based, fragmented and disjointed pursuit with no joined up goals for the economy or society, and create a UK wide labour market strategy that is shared property between the Westminster Cabinet and our devolved nations Minsters. It must focus on workforce resilience at the highest levels and put targeted investment in to those sectors and skills that are critical to keeping our four nations running now and in to the future. Central to that, are those utility industries that provide all our heat, light, power, fresh water, sanitation and waste collection that enable our very society to function”

The latest Energy & Utilities new 2020 to 2025 workforce renewal & skills strategy will be launched in June 2020.