Spring Budget 2024- Sector Response on Public Service Productivity Plan and More

This year the Spring Budget took place on Wednesday the 6th of March at 12.30 pm.

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Chancellor Jeremy Hunt delivered the spring budget which he called the Budget for Long Term Growth’. The Chancellor highlighted the following in his statement: 

• The Chancellor also launched a new Public Service Productivity Plan
• The economy turning a corner, with inflation expected to fall to the target next quarter, wages consistently rising faster than prices and better growth than European neighbours. 
• Chancellor capitalises on progress with ‘Budget for Long Term Growth’, sticking to the plan by putting over £900 a year back into the average worker’s pocket thanks to changes in the Autumn Statement and a second Employee National Insurance tax cut from 10% to 8% in April for 27 million working people. 
• 2 million self-employed also get a second tax cut through a further 2p reduction in the NICs main rate from 8% to 6% – saving the average self-employed worker £650 when combined with cuts at Autumn Statement. 
• Personal tax cuts since Autumn are worth £20 billion, slashing the effective personal tax rate for an average earner to its lowest level since 1975 and will lead to the equivalent of 200,000 more full-time workers joining the labour market. 
• High-Income Child Benefit Charge to be assessed on a household basis by April 2026, and immediate support for working families by increasing the threshold to £60,000 and halving the rate at which Child Benefit is repaid – representing a £1,260 boost on average for around half a million working families.   
• The NHS in England will receive a £2.5 billion day-to-day funding boost for 2024/25 and £3.4 billion in capital investment over the forecast period to help unlock £35 billion in productivity savings over the next Parliament by harnessing new technology like AI and cutting admin workloads – part of landmark Public Sector Productivity Plan to deliver better public services. 
• New tax reliefs and investments will help establish the UK as a world leader in high-growth industries such as the creative sector, advanced manufacturing and life sciences, while 28,000 SMEs will be taken out of VAT registration altogether – encouraging them to invest and grow.  

More tax cuts for working people, more investment and a plan for better public services headlined Chancellor Jeremy Hunt’s ‘Budget for Long Term Growth’ today, Wednesday 6 March. 

With the independent Office for Budget Responsibility (OBR) confirming inflation is set to fall to target a year earlier than previously expected, wages rising consistently and the economy outperforming European neighbours, the Chancellor said he would stick to the plan to improve living standards by rewarding work and growing the economy. 

Building on the 2 percentage point cut to Employee National Insurance at Autumn Statement, Mr Hunt announced a second 2p cut from 10% to 8% from April. Taken together with the cut to Employee National Insurance at Autumn Statement, this slashes the main rate of Employee NICs by a third and means the average worker earning £35,400 a year will be over £900 better off this year. 

The Chancellor also went further with tax cuts for the self-employed, having reduced Class 4 NICs from 9% to 8% and abolished the requirement to pay Class 2 NICs at Autumn Statement. Today he announced a further 2p cut to Class 4 NICs for the self-employed to 6%, meaning the average worker earning £28,000 will be £650 better off compared with last year. 

Combined with changes at Autumn Statement, today’s announcements deliver personal tax cuts worth £20 billion and reduce the effective personal tax rate for a median earner to its lowest level since 1975. The OBR says these reductions will lead to the equivalent of around 200,000 extra full-time workers by 2028/29, as people increase their working hours and move into work. This boost is why the Chancellor has prioritised NICs cuts in his ‘Budget for Long Term Growth’ and why he will continue to do so when fiscally responsible. He set out that his long-term ambition is to end the unfairness of double taxation of work. 

Mr Hunt also announced that the High Income Child Benefit Charge will be assessed on a household basis by April 2026, with a consultation to come on achieving this.  

To ensure working families benefit from increasing their earnings before this change is made, the threshold to start paying back Child Benefit will increase in April from £50,000 to £60,000 – a 20% increase which will take 170,000 families out of paying the charge this year – while Child Benefit will no longer need to be repaid in full until earnings exceed £80,000. This represents a £1,260 boost on average for around half a million working families, rising to nearly £5,000 for some families when combined with tax cuts since Autumn Statement. This will put an end to the current unfairness, where two parents earning £49,000 a year receive the full Child Benefit while a household with a single earner on over £50,000 does not. The OBR says the immediate changes to the HICBC will lead to an increase in hours worked equivalent to around 10,000 more people entering the workforce on a full-time basis. 

Public Sector Productivity Plan is launched

The Chancellor also announced a landmark Public Sector Productivity Plan which marks the first step towards returning public sector productivity back to pre-pandemic levels and will ensure taxpayers’ money is spent as efficiently as possible. OBR analysis suggests that raising public sector productivity by just 5% would deliver up to £20 billion of benefits a year.  

Backed by £4.2 billion in funding, the plan will allow public services to invest in new technologies like AI, replace outdated IT systems, free up frontline workers from time-consuming admin tasks and take action to reduce costs down the line. The NHS will receive £3.4 billion as part of this over the forecast period – doubling investment in digital transformation, significantly reducing the 13 million hours lost by doctors every year because of old IT and delivering test results faster for 130,000 patients a year thanks to AI-fitted MRI scanners that help doctors read results more quickly and accurately. This investment, which comes alongside an extra £2.5 billion cash injection for 2024/25 to support the NHS improve performance and reduce waiting times, means the NHS can commit to delivering £35 billion in productivity savings over the next Parliament, while the £800 million to boost productivity across other public services will deliver an extra £1.8 billion in productivity benefits by 2029. 

A £360 million package will support innovative R&D and manufacturing projects across the life sciences, automotive and aerospace sectors – with a further £45 million funding to accelerate medical research into common diseases like cancer, dementia and epilepsy – while the Green Industries Growth Accelerator will be allocated an extra £120 million to build supply chains for offshore wind and carbon capture and storage.  

Opportunity will be spread across the country with hundreds of millions in funding to extend the Long Term Plans for Towns to 20 new places and a swathe of cultural projects, while local leaders will also be empowered to improve their communities through more devolved powers and a new North-East trailblazer devolution deal which comes with a funding package potentially worth over £100 million to support the region’s growth ambitions. 

The Chancellor also took steps to make the tax system simpler and fairer. The ‘non-dom’ tax regime will be abolished and replaced with a fairer system from April 2025 where new arrivals to the UK pay the same tax as everyone else after four years – raising £2.7 billion a year by 2028/29. As the oil and gas sector’s windfall profits from higher prices are expected to last longer, the sunset clause on the Energy Profits Levy will be extended by a year to March 2029, raising £1.5 billion while encouraging investment in the UK’s energy security by promising to legislate for its abolition should market prices fall to their historic norm sooner than expected. 

Accompanying forecasts by the OBR confirm that the combined impact of decisions taken at Spring Budget and the preceding two fiscal events will increase the size of the economy by 0.7% and increase total hours worked by the equivalent of 300,000 full-time workers by 2028-29  – with the combined impact of government policy since Autumn Statement 2022 reducing the tax burden in the final year of the forecast by 0.6%. Today’s announcements will reduce inflation in 2024/25, bring the equivalent of over 100,000 people into the workforce by 2028-29 and permanently grow the economy by 0.2% – with borrowing falling in every year of the forecast. 

Lower taxes 

With the economy turning a corner and debt on track to fall as a share of GDP, the Chancellor delivered further tax cuts for working people – rewarding work, boosting growth and helping families with the cost of living. 

• Following a 2 percentage point cut in the Autumn Statement, the main rate of Employee National Insurance will be cut again by a further 2 percentage points from 10% to 8% in April – a one third reduction in the main rate of National Insurance which means the average worker on £35,400 will receive a tax cut of over £900 compared to last year. 
• Following a 1 percentage point cut in the Autumn Statement, the main rate of Class 4 NICs for the self-employed will be cut by a further 2 percentage points from 8% to 6% from April – saving the average self-employed person on £28,000 over £650 compared to last year when combined with scrapping the requirement to pay Class 2 NICs announced at Autumn Statement. 
• Personal tax cuts worth £20 billion delivered since Autumn, which reduces the effective personal tax rate for a median earner to its lowest level since 1975. 
• High Income Child Benefit Charge (HICBC) will be administered on a household rather than an individual basis by April 2026, with a consultation in due course, while around half a million working families will benefit from an increase in the threshold from £50,000 to £60,000 and raising the level at which Child Benefit is fully repaid to £80,000 – worth £1260 per family on average.   
• OBR says combined changes to NICs will lead to the equivalent of around 200,000 new full-time workers joining the labour market by 2028-29 as people increase working hours and move into work, while confirmed changes to the HICBC will bring in the equivalent of an additional 10,000 full-time workers.  
• Building on the single biggest investment in childcare in English history, nurseries and preschools will be protected from rising costs through a guarantee that future funding will rise with a combination of inflation, earnings and the National Living Wage – certainty the sector needs to expand and deliver the rollout, which will save some parents using the full 30 hours up to £6,500 a year. 
• The most vulnerable families will receive targeted support through a £500 million extension to the Household Support Fund for an extra 6 months to September 2024, helping local authorities to support people with the cost of essentials, as well as abolishing the £90 fee for Debt Relief Orders so households struggling with problem debts can get the help they need, and extending the maximum period for Universal Credit budgeting advances from 12 to 24 months. 

Better public services and Productivity

While growth is key to delivering high-quality public services, the Chancellor backed the NHS with more funding and outlined the first steps towards getting public sector productivity back to pre-pandemic levels. 

• Day-to-day public spending will increase by 1% higher than inflation on average over the next parliament, as Chancellor confirms spending levels will not be cut. 
• The Public Sector Productivity Plan announced today with a £4.2 billion investment will improve public service delivery and get better value for taxpayers’ money through better tech, freeing frontline workers from time-consuming admin and making earlier interventions to reduce costs later down the line.  
• The NHS will receive an additional £3.4 billion as part of this to invest in new tech and digital transformation, including making the NHS app a single front door for patients, piloting new AI to halve form-filling times for doctors, rolling out universal electronic patient records, and over one hundred upgraded AI-fitted scanners so doctors can read MRI scans more accurately and quickly. This improves patient care and helps unlock £35 billion in productivity savings by 2030. 
• This means the NHS can commit to raising productivity in the NHS to 2% on average by 2028-29, at the upper end of the 1.5-2% ambition in the Long Term Workforce Plan – delivering a health service fit for the future. The NHS also gets a £2.5 billion funding boost for 2024/25. 
• £800 million will be invested to boost productivity across other public services, including £230 million for drones and new technology like facial recognition which will free up police officers’ time for more frontline work and £75 million to roll out the highly successful Violence Reduction Unit model across England and Wales. 
• This investment in non-NHS public services will help deliver up to £1.8 billion of benefits by 2029, with further measures including digitising jury bundles to free up 55,000 working hours spent on admin, creating 200 new children’s social care place to tackle overspends, and expanding the use of AI across government to make it easier to spot and catch those who try to defraud the public purse. 

More investment 

Building on recent investments in the UK by Google, Nissan and Microsoft, Mr Hunt announced exciting new investments in key growth sectors and set out plans to support businesses of all sizes to grow. 

• Significant package of support to establish the UK as a world leader in fast-growing industries over the next five years, including over £1 billion in new tax reliefs for creative industries, £270 million in automotive and aerospace R&D projects focusing, and a £120 million top up for the Green Industries Growth Accelerator to help build supply chains for offshore wind and carbon capture and storage. 
• £45 million will fund medical research to develop new medicines for diseases like cancer, dementia and epilepsy, and the UK’s ability to manufacture them will be boosted by plans for a £650 million AstraZeneca investment to build a new vaccine manufacturing hub in Liverpool and expand their footprint in Cambridge – thanks to government support for the life sciences sector. 
• Opportunity will be spread across the country with hundreds of millions in funding to extend the Long Term Plans for Towns to 20 new places, over £240 million to build nearly 8,000 homes in Barking Riverside and Canary Wharf alongside a new life sciences hub, and a new £160 million deal to acquire two site to develop nuclear for our energy security.   
• Local leaders will be empowered, with a new North-East trailblazer devolution deal which comes with a funding package potentially worth over £100 million in support for the region, and powers devolved to Buckinghamshire, Warwickshire and Surrey.   
• Draft legislation will be published within weeks to extend full expensing – a £10 billion tax cut for business every year to help them invest for less – to leased assets when affordable to do so, strengthening one of the most attractive capital allowance regimes of any major country. 
• SMEs will be supported to invest and grow through a £200 million extension of the Growth Guarantee Fund, helping 11,000 small businesses to access the finance they need, and an increase in the VAT registration threshold from £85,000 to £90,000 which will take around 28,000 small businesses out of paying VAT altogether. 

Sustainable public finances 

The ‘Budget for Long Term Growth’ delivers lower taxes, better public services and more investment in a responsible way, the OBR confirming the Chancellor’s fiscal rules are on track to be met. 

• Underlying debt will fall as a share of the economy to 92.9% in 2028/29 – meeting the debt rule with £8.9 billion headroom. Headline debt will fall as a percentage of GDP every year from 2024/25. 
• Public sector borrowing falls in every year of the forecast. The deficit will be 2.7% of GDP in 2025-26 – meeting the second fiscal rule to get borrowing below 3% of GDP three years early – and by 2028-29 it falls to 1.2% of GDP, which is the lowest level since 2001-02.   
• Measures to tackle the tax gap will bring in an additional £4.5 billion a year by 2028/29, saving nearly £10 billion for the public purse when combined with policies announced at Autumn Statement. 
• The ‘non-dom’ regime will be replaced by a simpler system where arrivals have access to a more generous scheme for their first four years of tax residency before paying tax in the same way as everyone else, raising £2.7 billion a year by 2028/29 without deterring investment. 
• The Energy Profits Levy sunset clause will be extended from March 2028 to March 2029 to raise £1.5 billion a year, but legislation in the Finance Bill will abolish the Levy if market prices fall to their historic norm sooner than expected – maintaining investment in our energy security. 
• A duty on vapes will be introduced from October 2026 to protect young people and children from the harm of vaping, alongside a one-off increase in tobacco duty to recognise the role vapes play in helping people to quit smoking. This will raise a combined £1.3 billion by 2028/29. 
• Multiple Dwellings Relief will be abolished from June after showing no evidence of promoting investment in the private rented sector – raising £385 million a year – and the Furnished Holiday Lettings tax regime will be abolished from April 2025, raising £245 million a year while making it easier for local people to find a home in their community. 

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Sector Response

David Hughes, Chief Executive, Association of Colleges, said:

“The Chancellor missed another opportunity today to back his quest for economic growth by investing in the skills which will drive it. The lack of much-needed funding for colleges in today’s spring budget will mean skills shortages will continue to hamper employers who are struggling to find the skilled people they need to grow. There is a simple reality, that the Prime Minister’s economic priorities cannot be achieved without an boost in investment in skills through colleges.

“College budgets and staff will benefit a little from the national insurance cut, but in a tax-cutting budget, the Chancellor has missed the opportunity to scrap the unfair VAT rules imposed on colleges. That simple and fair move would have injected £210m into colleges to help meet the students needs.

“The government says its focus is to grow the economy, and yet the Chancellor has once again failed to invest in the skills which are an essential ingredient to achieve that. The Chancellor’s ambition for productivity gains across the public sector also require new skills in AI, machine learning, digital and other job specific subjects, but the funding is not there to support delivery of those skills in colleges.

“It looks like another year in which the incredible work colleges do will be in spite of the low pay, low investment and inadequate funding that colleges have to deal with; a true missed opportunity and an own goal.”

Ahead of the 2024 spring budget, Paul Whiteman, general secretary of school leaders’ union NAHT, said:

“The budget is this government’s last chance before the election to invest in the nation’s children and reverse the crippling cuts schools have seen since 2010. The Prime Minister is running out of time to make good on the promise he made last year, that his “main funding priority at every spending review” would be education.

“The RAAC crisis shows that schools are struggling with outdated and inadequate facilities. It’s hard for teachers to get children to concentrate on their learning when they are distracted with leaky ceilings, crumbling, cold classrooms, and broken boilers.

“We are also calling on government to immediately commit sufficient funding for children and young people with special educational needs (SEND). The number of young people who require SEND support has spiralled at the same time as external support services have been cut. School finances are so pressed that they cannot cover the extra cost.

“The crisis in teacher recruitment and retention will snowball into a national emergency if the government does not restore teachers’ and leaders’ pay to 2010 levels. That starts with a double digit pay rise this year. Teaching is a fantastic career – but a decade of below inflation pay rises, and poor terms and conditions at a time when more employers are offering greater flexibility mean it is just not competitive in the graduate marketplace. This pay-rise must not come at the expense of the school budget, and we urge the Chancellor to protect any school funding on Wednesday.”

Camellia Chan, CEO and Co-Founder of Flexxon

“Following this week’s announcement of the £800m funding package to improve the public sector through technology, today’s Spring Budget further demonstrates the UK’s commitment to R&D and using tech to create a better future. That said, it’s worrying that cybersecurity was not mentioned more in Hunt’s speech. This is especially the case given the incredible rise of AI. AI can be a force for good, but in the wrong hands, it can be manipulated, and cyber-criminals are the first to do so.

“Public sector organisations, in particular, are extremely vulnerable to cyber-attacks – take the Greater Manchester Police and Gloucester City Council incidents last year, for example. This is because of the sensitive data they hold and the chaos that can follow if hit. To meet the fast-evolving threat landscape, the government and organisations themselves need to be proactive in recognising security gaps and must address those with innovative, proven solutions at both the software and the hardware layer.”

Natalie Perera, Chief Executive of the Education Policy Institute (EPI), said:

“It is disappointing that today’s Budget provides little additional support for early years and education.

“Research published this week by EPI found that pupils are still feeling the effects of the Covid-19 pandemic, with those from poorer families struggling the most to catch up.

“If the government is serious about delivering a world-class education for all, it needs to prioritise spending in the early years, targeted to families who need it the most, as well as a sufficiently funded high quality universal offer. It also needs to prioritise funding for disadvantaged pupils in schools and colleges. This includes increasing funding and support for pupils with Special Educational Needs and Disabilities, providing mental health support in schools and considering how best to support schools to offer an
extended school day.

“But we also cannot expect schools in isolation, to fix all of society’s problems. The increase to the child benefit threshold is a positive step but there is an urgent need for a cross-government child poverty strategy which recognises the root causes of education inequalities such as poverty, housing, healthcare, transport, and many other aspects of daily
life.”

Julie McCulloch, Director of Policy at the Association of School and College Leaders, said:

“The Chancellor spent more time name-checking film stars than he did on education. A public sector productivity plan – whatever that actually is – will not pay the bills for schools and colleges anytime soon. A building programme for special schools is welcome but does not address the wider crisis in special educational needs funding.

“This Budget has failed to support schools, colleges, trusts, and the children and young people they serve. Education is a vital part of any credible long-term plan for the country because it is an investment in skills, knowledge and our ability to thrive and flourish as a nation. The Chancellor has instead focused on a desperate attempt to secure short-term political gain by cutting taxes as a pre-election sweetener. This is despite the Prime Minister telling the Conservative Party Conference in October last year that his main funding priority in every spending review will be education because ‘it is the closest thing we have to a silver bullet’ and that it is ‘the best economic policy, the best social policy, the best moral policy.’

“The reality behind the rhetoric is that the Department for Education’s own analysis shows that schools only have enough headroom in their budgets to increase spending by 1.2% in the next financial year. This is unlikely to meet rising costs or be enough to fund anything other than a derisory pay award which will worsen the recruitment and retention crisis. It is likely that many will have to make further cuts to pastoral support, curriculum options, classroom resources and maintenance budgets. The government repeatedly boasts that it is spending a record amount on schools but this was almost always true in every year prior to 2010 until this government plunged schools and colleges into a funding crisis.”

Nichola Hay MBE, Director of Apprenticeship Strategy and Policy at BPP, states:

“The Chancellor has not addressed the UK’s ongoing skills shortages within this year’s Spring Budget, and businesses across the country are likely to feel disappointed by this.

“If we are looking to close the UK’s skills gap, then the Government must take a holistic approach to matters. For example, it would have been encouraging to see the Chancellor setting aside sufficient funds to create a dedicated, sustainable, and long-term skills system, aligned to a National Skills Strategy and an Industrial strategy, with learners and employers at its core. 

“From there, it is then up to training providers to work closely with employers to provide robust solutions for their workforce planning, recruitment, and people development requirements, further bolstering the productivity and growth of the business, and the wider economy. This will also ensure we’re producing the talent pipeline this country and its employers need to capitalise on opportunities presented to us.  

“Apprenticeship programmes are a key way in which we can plug the skills gap. They create new channels to build and attract a more diverse talent pool and help upskill/retrain the existing workforce. Whether it’s full-time carers, returners, individuals changing industry, or recent graduates looking to enter/re-enter the workforce, an apprenticeship can create an opportunity for all ages and at all levels which supports widening participation into a profession.”

Ben Harrison, Director of the Work Foundation at Lancaster University, a leading think tank for improving working lives in the UK, on the Chancellor’s Spring Budget today:

“The Chancellor set out his ambition to build a higher wage, higher skill economy and make work pay. But on his watch, an extra 500,000 people fell into severely insecure work in 2023 alone – leaving 6.8 million people stuck in jobs characterised by low pay and without key employment protections.

“The Chancellor’s decision to prioritise the short-term sugar rush of a further 2p cut to National Insurance over further public service investment is ill-advised. The reality is cutting NICs is likely to disproportionately benefit those on higher incomes and will do little to address the financial penalty of £3,276 per year experienced by those in insecure jobs.

“It will also do little to address the UK’s long-term sickness crisis. Since December 2019, on average nearly 500 people have become economically inactive due to ill health every day – leaving us with a near record 2.8 million people out of the labour market as a result.

“While committing to fund the NHS productivity plan is welcome, we will also need additional long-term investments in our healthcare infrastructure and action to improve the quality and security of jobs on offer if we are to see more of those people return to work and support future economic growth.”

Daniel Kebede, General Secretary of the National Education Union, said: 

“Once again, the Chancellor has shown that he does not care about the crisis that threatens to paralyse education in this country.

“Jeremy Hunt has done nothing to address the funding crisis in our schools and colleges. He has turned his back on the teacher and support staff recruitment and retention crisis, the record class sizes, the decrepit state of our school buildings.

“In October, the Prime Minister said that education was ‘the best economic policy’ but has not put his money where his mouth is. Jeremy Hunt says he wants a ‘high skills, high wage’ economy, but has failed to invest more in education to deliver what he says the country needs.

“The inescapable fact is that 70% of schools have less funding in real terms than in 2010. And today, Jeremy Hunt’s message is that he wants them to just keep doing more and more with less and less. And it’s just not sustainable.

“Even after the investment of £105 million for special free schools, the Chancellor plans to cut capital investment in education from £6.3 billion pounds this year to £6.1 billion pounds next year.

“We are seeing major real terms cuts in school and college funding. There are huge pay cuts against inflation for teachers and support staff, leading to an exodus from the profession. Workload is sky-high and many schools are in deficit, with class sizes at record levels and a crisis in SEND funding. The underfunding of education has created huge recruitment and retention problems, with teacher recruitment targets missed by huge amounts and widespread teacher shortages.

“While Government ministers spout platitudes about excellence and Gillian Keegan says she is doing a ‘f****** good job’, our schools and colleges have to deal with the consequences and so do the nation’s children.

“This Government has no strategy to solve the problems in our schools and colleges or close the disadvantage gap for pupils. Child poverty has grown on their watch.

“This is the desperate last hurrah of a Government seeking to buy votes before a General Election with tax cuts and perks for their friends, rather than doing what is right for our children. Anything less than serious additional investment in schools and colleges is a betrayal of parents and young people as well as of educators.

“The NEU’s preliminary ballot of teacher members in England has opened. It calls for a fully funded above-inflation pay increase, as well as funding to pay for additional staffing – and asks if members are willing to take industrial action with that aim in mind. Strike action is the last thing our members want but we can’t stand by while education is destroyed by a Government that doesn’t seem to give a damn.”

Julian Mulhare, Managing Director, EMEA at Searce, comments:

“The government’s commitment to efficiency and innovation in revolutionising public services via digital transformation efforts is encouraging, aligning with the overarching vision for the UK to emerge as a global technology powerhouse. However, it is disappointing that AI’s implementation has only lightly been addressed. Leaders must take a more holistic approach to AI adoption, firmly rejecting the notion of AI as a tool to cut headcounts and replace humans. It is imperative businesses actively involve a diverse array of voices as AI becomes increasingly ingrained in processes. To foster trust and expedite AI’s integration among teams, it must be incorporated not as a threat but as a collaborative tool for workers, propelling business agility and growth.”

Christian Rebernik, Co-CEO at Tomorrow University, comments:

“With the impressive allocation of £800m announced this week and the digital transformation reforms planned for public services, this year’s budget signals a new age; the rapid integration of AI within organisations, for example, presents transformative opportunities for our future. But this also underscores the urgency to bridge significant skills gaps to ensure people’s welfare. Companies must invest in providing equal upskilling opportunities for their talent to acquire technological literacy – highlighted as essential for all business areas by the World Economic Forum, and especially crucial for current workforces to thrive in an AI-driven world.

“As we progress, it is imperative that the government and businesses alike view AI as a tool for collaboration between technology and human expertise to drive equitable futures so that no one gets left behind. Tomorrow’s leaders and workforces must understand that developing human-centred AI is not only efficient but also fundamental for facilitating sustainable technological growth. Only then will it foster employee productivity, business scalability, and deliver true economic value.”

Nikolaz Foucaud, Managing Director, Coursera EMEA said:

“Whilst businesses are no doubt welcoming the government’s decision to make full expensing permanent, there is still more to be done to support staff shortages and fill skills gaps.

“One such area is the Apprenticeship Levy, which has not been reformed in the way many businesses have hoped. Without reform, businesses will still have trouble accessing the funds, meaning both businesses and young people will continue to miss out on some of the opportunities that apprenticeships offer the workforce.

“In today’s fast changing labour market, there is a greater need for a diversified, complementary skilling approach to vocational education. The blend of hands-on apprenticeship experience with the flexibility and versatility of online learning could form the foundation of a potent strategy to empower the UK workforce for a thriving digital future.”

Paul Whiteman, general secretary at school leaders’ union NAHT, said:

“Last year, the Prime Minister promised that the UK “would rival the best education systems in the world” but yet again, children and schools have been largely ignored in the Budget.

“Our children deserve better – today’s spending announcements mean that too many will continue to be taught in decrepit classrooms for the foreseeable future. School leaders will be concerned to hear the chancellor talking about the need for greater efficiencies in education, and many will be left wondering where they will be found when budgets have already been cut to the bone.

“While the investment in new special schools is welcome, it does not begin to address the huge shortages of specialist staff, capacity and funding for pupils with SEND, either in schools or the wider social care and health services which are already under so much strain.

“Until the fall in teachers’ and leaders’ pay is addressed, and working conditions are improved, the spiralling crisis in teacher recruitment and retention is only set to worsen.

“When the election comes – we will be uncompromising in our ask to all parties to provide funding for our children – to repair the school estate, provide essential services for vulnerable children and recruit and retain enough teachers.”

David Smith, CEO, Lifetime Training, said: 

“It is disappointing that the Government has not used today’s Budget to set out much-needed changes to support apprenticeship delivery through the levy, announcing only minor and previously launched sector-specific funds. With funding bands unchanged and rising costs, many courses and therefore training providers simply cannot survive. 

“What our sector – and learners – need is a clear skills vision from government, underpinned by policies which address the needs of the UK, now and in the future.  And the models through which we can best deliver them. We now need the freedom to adapt our provision to the skills gaps and needs which exist and be responsive to significant trends like AI adoption and an ageing population. 

“We hope that during this election year, all parties will listen to levy-paying employers and training providers by including greater flexibility into the system.”

Dr Joe Marshall, Chief Executive of NCUB said:

“In today’s Budget, the Chancellor rightly acknowledged that research, innovation and skills are central to leading the UK into a more optimistic, prosperous age. However, there were no bold, new announcements to truly shift the dial and drive growth through a more innovative, highly skilled economy. Previous commitments to grow public research funding and release more private sector investment are critical, but further intervention is needed to put university funding on a more sustainable footing. Only then will we build, grow and attract further private investment into the UK.”

“Last week revealed that business research and development (R&D) investment in the UK dropped by 0.4% in real terms between 2021 and 2022. It is therefore clear that existing measures alone do not go far enough to realise the UK’s Science Superpower ambitions and for the nation to reap the rewards of more jobs, more innovative and productive industries, as well as greater prosperity, security and sustainability. The UK’s Science Superpower ambition is not an obscure or remote vision but represents the UK’s fundamental plan for growth intended to deliver a tangible, positive impact on peoples’ lives, and prepare for a radically different future in the fourth industrial revolution.”

“To unlock economic growth, it is vital that the Government sets an ambitious target and plan to raise private R&D investment. The Government must not forget their commitment to making the UK a Science Superpower. We need action now if we are to continue to build to secure a central role in the age of innovation.”

Ben Blackledge, Chief Executive, WorldSkills UK, said:

“The Chancellor is right to focus on building a high wage, high skill economy as the best way to deliver growth in jobs, productivity and investment in all parts of the UK and greater prosperity for our communities.

“Through our access to global best practice in skills development and ability to benchmark the UK skills against our leading competitors in Europe, America and Asia, we see again and again how vital it is that high quality skills and FE sector are put at the centre of any ambition to drive growth and investment.  

“At WorldSkills UK we are using this international knowledge to support the Chancellor’s priority sectors through our Centre of Excellence programme in partnership with NCFE to make sure that advanced manufacturing, net zero and digital firms have access to the pipeline of talent they need to thrive. We will also soon be publishing new research on how WorldSkills UK world-class programmes can support the screen industries – bolstering the Chancellor’s aim for the UK to be second only to Hollywood for film production next year.

“With independent research showing that young people involved in our competition programmes can earn on average 60% more than those who don’t take part we are confident that our programmes ‘make work pay’ and with Team UK in partnership with Pearson heading to WorldSkills Lyon in September this year we will be even better placed to help deliver a world-class skills economy and look forward to working with all our partners across the UK to make this happen.”

Chloe Field, NUS UK Vice President Higher Education, said:

“Though we are pleased to see reduced tax benefits for non-doms and continued windfall tax on North Sea oil and gas, this is yet another budget that ignores students and workers.

“Students do not have enough financial support. The average student rent in England accounts for over 99% of the average maintenance loan, leaving students with just 50p per week to live on. This is forcing many of us to work over 20 hours a week on top of full-time study, contributing to high rates of loneliness, and impacting our mental health as well as our grades.

“We need the Government to increase maintenance loans and reintroduce maintenance grants in line with the Real Living Wage so students can focus on our studies rather than working every hour of the day just to survive.

“The government need to take this crisis in education seriously, and really rethink the funding model which gains profits of students whilst continuously eroding their education and experience.

“We urge the Government to U-turn on their decision to cut public spending further, and instead increase it, funded by further tax increases on the super-rich, and on climate-destroying industries.”

Neil Carberry, Chief Executive, Recruitment and Employment Confederation (REC):

“If the Chancellor’s goal was to stimulate investment and drive per person growth, he hit the post.

“There were plenty of initiatives in the Budget today that business will welcome. From AI skills support in professional services, to growth support on finance for small businesses and a patchwork of sectoral measures. There were many sensible steps. But taken together – they didn’t add up to the industrial and workforce strategy we really need.

“It beggars belief that the Chancellor made GDP per capita, driven by the domestic workforce, a core goal of his speech but had nothing to say about the skills system beyond a few specific pots of spending and pieces of devolution. Further focus on childcare will be welcomed by employers all over the country, though.   

“Cutting employee National Insurance is the right call when addressing personal taxation, because it is targeted on workers and particularly helps the low paid. REC members agree with the Chancellor that taxes on labour are too high – but would have welcomed the acknowledgement that this is also true for businesses, many of whom are really struggling with a cauldron of rising costs. From a minimum wage that has risen 20% in two years to inflation and higher business taxes – there needed to be more to really get investment going.”

On temporary staffing and the NHS, Neil added:

“Healthcare agencies keep the NHS open. But on-framework provision has been made unsustainable over the past few years by poor management and unrealistic cost assumptions. You can’t freeze wages for temporary nurses through a pandemic and inflation spike – but that is what this government tried to do, super-charging higher cost off-framework provision and hidden high-cost Bank provision.

“Hopefully, today is the start of a discussion where agencies can finally be allowed to help the NHS reduce cost and improve the standards of care – but that requires a true partnership. We are ready to help. The deadline the government has set for ending off-framework this summer is unrealistic and would likely damage the quality of care and increase waiting lists.”

Paul Nowak, TUC General Secretary said:

“This is a deeply cynical Budget. The Chancellor knows he won’t have to live with the consequences of the savage spending cuts he’s already imposed across large parts of our public services.

“At a time when our schools, hospitals and councils are on their knees, we needed a serious plan to rebuild Britain. All we got was wishful thinking on productivity and pre-election gimmicks.

“This was the last roll of the dice from a desperate government that has presided over 14 years of economic failure on growth and living standards.

“The Tories’ record speaks for itself.

“The worst real wage squeeze in modern history. The worst growth since the Great Depression. Crumbling classrooms and record NHS waiting lists.

“The country deserves so much better.”

On the cut to NI Paul said:

“After 14 years of Conservative misrule millions are worse off.

“We all want to ease the financial pressure on families. But this is a political con-trick – giving with one hand while taking with another.

“No one wants tax cuts at the expense of their local services. We need a proper long-term plan to raise wages for everyone and to restore public services.”

On the Chancellor’s action to make non-domiciled residents pay their fair share of tax, Paul said:

“The Chancellor’s action on non-doms is too little too late. People will never forget that when our schools and hospitals were starved of funds, the Tories put the very wealthiest first.

“His failure to act sooner on non-doms cost the exchequer billions in lost revenue.”

Dr Patrick Roach, General Secretary of the NASUWT-The Teachers’ Union, said:

“The Chancellor had the choice today to deliver real investment to secure the future of education and public services, but he chose not to do so.

“Today’s Budget has once again failed to deliver for pupils and their teachers.

“The decisions taken by the Chancellor and his Government over the last 14 years have decimated our education and children’s services. Yet rather than announce any programme for starting to repair the damage done, the Chancellor’s response is to demand that already over-stretched teachers and headteachers work more efficiently.

“Schools and colleges do not need any more lectures from this Government. They need real investment to deliver the best for the children and young people they are responsible for teaching.

“Our crumbling public services will be this Government’s toxic and sorry legacy, for which children, families and working people will pay the price for years to come.”

Stephen Evans, chief executive of Learning and Work Institute, said:

“Budgets come and go, but the UK’s fundamental challenges remain. Real wages are £12,000 per year below pre-financial crisis trends, employers are investing 26% less in training per employee than in 2005, and too many people are outside the workforce due to long-term sickness. 

“Taxes should always be as low as possible, but high-quality public services are essential for growth too. The Government’s public spending plans could mean a further £380 million cut to adult skills in England – already £1 billion lower than in 2010 – and cutting off an engine of growth. 

“There was little new on employment, but that follows more substantial investments in previous budgets. These were welcome and will take time to implement, but we need more ambition given only one in ten out-of-work disabled people get help to find work each year.” 

Anthony Painter, Policy Director at the Chartered Management Institute (CMI), said: 

“The Chancellor’s focus on growing the economy and increasing public sector productivity, while welcome, will not, in practice, be realised unless we match investment in high quality management skills with consistent public and private investment.

“Forecasts of low levels of public investment for the rest of the decade in the Budget are concerning. And unless we begin to prioritise management capability we will not be able to close productivity gaps with the leading industrial nations.

“Newly-released CMI research revealing that the UK suffers from chronic underinvestment in management and leadership training shows that the UK cannot overcome its competitive disadvantage with other leading economies – notably the US, Germany and South Korea – unless it commits to developing the next generation of highly-skilled managers across our public services and private industry and makes a bigger commitment to long-term investment in tech, infrastructure and public services.

“The pressures facing public services, and in particular the NHS, are having an outsized impact on UK workplaces. Absenteeism, lost productivity, and growing uncertainty about the ability to access care when people need it are contributing to a worrying picture for both employers and employees. CMI research has consistently shown that excellent management means excellent public services. AI and other tech innovation is so important and the investments announced today in that regard are welcome. So is having management and leadership able to maximise their impact and we need to hear more about plans there.

“If there’s a theme we need to adopt far more decisively in the coming years, it’s one of determined focus on high-level skills and transformative investment. Elements of this were visible today and in the Autumn Statement. But we still have much, much further to go.”

Rachel Solomon Williams, Executive Director at the Aldersgate Group, said:

“Businesses stand behind the net zero transition and need the right policy signals, a supportive regulatory framework and long-term certainty to make the necessary investments in the UK. We welcome clarity on the funding envelope for the next Contracts for Difference allocation round. The Government must set out the details for the achievement of the 50GW offshore wind target by 2030 and grid decarbonisation commitment, to help leverage vital investment into the deployment of renewable energy and local areas.

As we await further details on plans to reform the grid connection process, we look forward to engaging with the new taskforce announced today to explore alternative dispute resolution mechanisms in planning. Planning can play a significant role in delivering much-needed homes, the energy infrastructure of the future and the restoration of our natural environment. However, to realise the Budget’s stated vision of long-term growth, it is essential that Government put forward a long-term industrial strategy, helping to drive investment across the whole of the UK and ensuring that the current and future skilled workforce needed to deliver a net zero economy.”

British Safety Council’s Chairman, Peter McGettrick said:

“The Chancellor was clearly building on his Autumn Statement with a number of measures to encourage investment in British businesses, intended to support people in work and boost growth. This includes the cut to National Insurance, as well as a new British ISA and changes to help small businesses. There were also further measures to support people with the rising cost of living and a welcome extension of support for those most in need, although we know inflation continues to create a challenging operating environment for businesses and individuals alike.

“Investment announced by the Chancellor to boost NHS productivity and increase capacity in the health system will be welcomed by those awaiting treatment and would help people remain in or return to work. A tax on vapes is welcome if it can discourage more young people from taking up the habit and getting addicted to nicotine, but must be combined with support for people to give up smoking.

“With commitments to improving the efficiency of key public services, we would also urge the Chancellor to commit to ensuring that the Health and Safety Executive and its Buildings Safety Regulator receive adequate funding, through its sponsor body the Department for Work and Pensions, allowing them to fully fulfil their core respective purposes of making our homes and workplaces safer for all.”

SMF Director Aveek Bhattacharya said:

“Today’s Budget was a relatively low-key affair, with the notable exception of the National Insurance cut. If anything, it demonstrated the case for reducing the number of annual fiscal events from two to one – having made several big consequential announcements in last year’s Spring Budget and Autumn Statement, and presumably wanting to keep some powder dry before the election, there didn’t seem to be very much to say. The two costliest announcements – cutting national insurance and freezing fuel duty – reflect questionable priorities, and the pressure such events generate to produce gimmicky ‘rabbits out of hats’ rather than doing the responsible thing.

Much of the rest of the Budget was worthy and unobjectionable in its rhetoric – the apparent embrace of a preventative state is particularly encouraging. But initiatives like digitising the NHS, modernising the courts and improving police methods will depend more on the execution than the planning. Moreover, if the Government is to raise public service productivity, it would do well to remember that the public sector is fundamentally driven by its people, and as such, improving leadership and management should be a central priority to raise efficiency”.  

On the cut to rate of National Insurance, SMF Senior Researcher Sam Robinson said:

“Today’s cut in National Insurance is the right move in the wrong context. Reducing the tax burden on workers is a welcome step, but in the UK’s parlous fiscal situation, this had to be offset by ambitious reforms to taxes on wealth, property and consumption. The cut to NI could have been the start of a sound strategy to rebalance the tax system and make it work better for the economy. Instead, it looks more like a symbolic gesture.” 

On changes to improve public sector productivity, SMF Researcher Niamh O Regan said:

“Today’s announcements on investment in technology to help modernise public services and improve delivery are welcome and necessary. Executed well, they could reduce the administrative burden on public sector staff and help to rebalance workloads. However, it is the quality of public sector leaders and managers that will decide how much is delivered. There is a growing body of evidence showing the importance of good leadership and management to public sector productivity, but it remains neglected in policy circles. Technological improvements will only achieve their potential if the people using the new kit are well managed and effectively deployed.”

Martin Baxter, Deputy CEO at the Institute of Environmental Management & Assessment, said:

“Today’s Budget did little to shift the dial on investment in green skills and jobs across the UK, which we know is critical if we are to meet long-term climate and environmental targets.

“We now await the publication of the government’s Green Jobs Plan later this month and hope that it sets out a clear pathway for greening the UK’s workforce, with the necessary funding and financing considerations baked in.”

Dr Marc Warner, CEO, Faculty

“After years of stalling productivity and flatlining growth, backing our brilliant AI sector is one of the few levers the Chancellor can pull to help ensure the UK remains globally competitive. 

The technology will play a huge part in improving public service delivery, as well as boosting workforce productivity – but it must only be used in a safe, connected and human-first way.

The AI era is here, and the Chancellor’s announcement today is another positive step along the Yellow Brick Road – a path to safely harnessing AI’s vast benefits whilst managing its risks.”

Ben Willmott, head of public policy for the CIPD, the professional body for HR and people development, commented:

“The Government’s focus on boosting research and development and growth in high-tech and green energy sectors, while critically important, is too narrow. This Budget sorely lacked a broad economic strategy to improve living standards and boost productivity across the economy including in sectors like retail, hospitality, transport, logistics and social care which employ millions of people.”

“There is a real and urgent need for a workforce plan for the UK to raise employer investment in skills and support workers’ wellbeing and participation in the labour market.”

 “The National Insurance cut will be welcomed by many workers but it’s highly optimistic to suggest that this move alone will get the equivalent of 200,000 more people into full-time work and solve for one in five vacancies. The factors that affect UK labour market participation are much more complex. For instance, there was nothing in the Budget to reduce rising levels of economic inactivity due to ill health. Health policy is economic policy and requires more ambition from the Government and significant changes such as improving employer access to occupational health services and reforms to Statutory Sick Pay.”

“There was also very little to address skills and tackle the hard-to-fill vacancies facing many employers. We urgently need the Government to heed the long-standing calls of employers and business groups and reform the Apprenticeship Levy to reverse the collapse in the use of apprenticeships in SMEs and among young people since 2017. This vital reset would help boost training and development in all its forms and ensure that more apprenticeship opportunities go to the group that most need and benefit from them, young people.”

“The Government is right to prioritise improving public sector productivity. However there needs to be a complimentary focus on improving people management and workforce skills if new technology is to be adopted effectively to improve the delivery of public services.”

Clare Howard OBE, the Chief Executive of Natspec:

“We welcome the Chancellor’s recognition of the importance of support for children with special educational needs and disabilities (SEND) by announcing in his Spring Budget an investment of £105 million to build 15 special free schools. However, we are disappointed that the needs of young people aged 16 – 25 requiring specialist further education (FE) have once again been overlooked.

“Local authorities have spent less than one per cent of the non-ringfenced capital funding for the SEND provision made available to them by the central government on the post-16 provision. In the meantime, specialist FE colleges are in urgent need of improvement and repair and are unable to adapt or develop their buildings to meet the increasingly complex needs of the young people they serve. The government must remember that the SEND system runs from 0 – 25. Investing in specialist FE colleges will allow them to continue providing high-quality education for the increasing numbers of 16 – 25-year-olds needing specialist provision. It will also help the government to close the disability gap as more young people with SEND are equipped with the skills they need for employment and contribute to a successful economy.

“Further clear, actionable strategies for unlocking the potential of young people with SEND can be found in Natspec’s 2024 manifesto.”

Jacob Diggle, UK Youth Chief Impact Officer, said:

“Today’s Spring Budget was another missed opportunity for the Government to meet the needs of young people. We cannot wait much longer.

“Increasing access to quality youth work is not just a moral imperative, it has much wider economic value. Youth work is a proven solution to the challenges young people are facing but it is being ignored. We cannot afford not to invest in youth work.

“The Government’s National Youth Guarantee promises all young people safe places to go, meaningful things to do and experiences to develop and give back to their communities. We need the investment to make this guarantee a reality.

“As we head into the next General Election, it is vital all political parties prioritise support for young people. We urge all parties to guarantee sustainable investment in quality youth work, not just for the next generation, but for the benefit of the whole country.”

AELP Chief Executive, Ben Rowland said:

“Only economic growth will improve the gloomy situation, and that requires a vibrant skills system. We need to invest in skills at all levels as so many of our economic and societal problems stem from this lack of investment, yet the Chancellor doesn’t seem to recognise this basic truth. As a result, we’ve just seen another disappointing budget where skills seems to have been forgotten once again.

“We urgently need a national conversation about what level of funding is required to close the country’s skills gap. Given proposed cuts to non-ringfenced departmental budgets and previous eroding of funds for undervalued and often overlooked, adult education feels particularly vulnerable and at risk in the future.

“Although we’re pleased to see apprenticeships remain an employer-led all-age, all-levels system, we are concerned about problems being stored up for the future with actual spending on apprenticeships leaving limited headroom for growth and much needed funding rate increases.

“Whoever makes up the government of the day at the next Comprehensive Spending Review has the chance to use it as an opportunity to inject much needed resource into the skills sector. AELP urges all political parties to ensure skills investment is a priority in their forthcoming General Election manifestos.”

Craig Beaumont, Chief of External Affairs, the Federation of Small Business said:

“We’re pleased today to see the Chancellor bring forward positive measures to grow the economy – especially the increase to the VAT Threshold, a particularly key FSB ask for this Budget after a 7-year freeze, and the cut to self-employed National Insurance Contributions (NICs) which is a long-held campaign since FSB was formed 50 years ago this year.

“The Treasury has worked constructively with FSB through the Budget process, and there are several other measures in the full Budget that are welcome, including the extension of the Recovery Loan Scheme as it evolves to create the Growth Guarantee, and a clear direction to HMRC to reduce its administrative burden.  This builds on positive measures announced in the Autumn Statement on tackling late payment as well as extending the 75% SME Retail, Hospitality and Leisure Business Rates Discount and freezing the small business rates multiplier – decisions that were tough choices given tight public finances, but target resources where they are most needed, and have the biggest bank for their buck – in small businesses right across the country.”

Irene Graham OBE, Chief Executive Officer, ScaleUp Institute said:

“The Budget today takes forward a number of important initiatives that should support the scaleup economy across the UK, including the new British ISA and Bond schemes and pension fund disclosures, alongside the skills and sector initiatives such as those linked to AI, Creative and Advanced Manufacturing. It is also good to see the announcements on  LIFTS partners and the Growth Guarantee scheme, as well as the development of the PISCES initiative;  each of which should further support funding towards scaling firms. We look forward to continuing to work with Government and the private sector on the implementation of these.”

A Kraft-Heinz spokesperson said:

“We welcome the support this Budget will bring for businesses like Kraft Heinz which are looking to invest more in Britain’s future. In particular, the increased investment in GIGA will help us on our path to Net Zero; providing new funding for Hydrogen projects like the one we recently announced at our Kitt Green factory in Wigan.”

Commenting on the Childcare package

Chris McCandless, CEO , Busy Bees in Europe, said:

“When the Chancellor announced the expansion of subsidised childcare for working families 12 months ago, we were supportive of the commitment to give more children the best start in life. To create the additional capacity, we needed to invest in our staff and centres. For any business that is difficult without funding certainty, so we’re very pleased that the Government has provided this clarity today. As the UK’s largest childcare provider, it gives us the confidence to invest to grow our business and support more families, in the knowledge that the funding we receive will rise in line with inflation and other critical fixed costs.”

Commenting on the measures in the Spring Budget targeted at supporting the Creative Industries

Andrew Lloyd Webber said: 

“This is a once in a generation transformational change that will ensure Britain remains the global capital of creativity.”

Beatrice Barleon, Head of Policy & Public Affairs at EngineeringUK said:

“We welcome the Government’s commitment to invest in crucial sectors, such as engineering and technology, and Small to Medium Sized Enterprises in the UK, including for example the Green Industries Growth Accelerator (GIGA). We also share the pride that the Chancellor clearly felt when talking about how the UK is becoming a leading force in the technology sector, comparing it to the Silicon Valley.

“However, given all this, we are extremely disappointed that there is no mention of the need to invest more and focus on skilling the future workforce. Without more skilled young people coming through the UK education system, UK businesses will struggle to grow and stay competitive compared to other countries.

“There is an acute STEM teacher shortage affecting young people’s STEM education and therefore their ability to pursue careers in these vital sectors, yet there was no mention of teachers and how the Government intends to support them. There was also a lack of focus on how crucial training routes, such as apprenticeships, will be enabled to grow into the future, and how this will be funded.

“We renew our ongoing call for the Government to develop a clear and properly funded STEM skills plan. This should include investment in careers outreach and education, apprenticeships for young people aged 16-19 and commitment to sustaining existing funding levels for STEM teacher professional development.”

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Photo Credit: HM Treasury Flickr