Recruitment and Employment Confederation chief executive Kevin Green said: "Yesterday's statement has shown that the Government now understands there is no magic bullet to achieving jobs growth and that a multi-pronged approach is necessary.
"It is right to drive initiatives across a range of policy areas - from streamlining employment rules and providing clarity on business tax to macroeconomic stimuli such as fiscal incentives for taking on young people.
"Green-lighting infrastructure projects and making it easier for companies to access liquidity will also give some much-needed oxygen to the jobs market".
"But more could have been done to stimulate demand, for example, through a national insurance contribution holiday for SMEs taking on young job-seekers. The Office for Budget Responsibility (OBR) forecast has underlined the extent of the challenge that lies ahead and the need for practical measures that can make an immediate difference to both businesses and jobseekers. The Government needs to deliver in all of the areas announced today and must react positively and promptly to proposals from the business community for stabilising and boosting the UK labour market".
John Philpott, chief economic adviser to the CIPD, said: "The OBR forecasts have moved in line with those made by the CIPD during the past 18 months. The OBR now expects the public sector to shed 710,000 jobs by 2017, a very sharp increase on the previous projection but very close to CIPD estimates drawn from surveying public sector employers. As a result, and in combination with a weaker outlook for private sector job creation, the OBR now expects unemployment to peak at 2.8 million by the end of 2012.
"The Chancellor will have to acknowledge that this is the price of sticking with his fiscal Plan A, and things could yet turn out to be worse if the situation in the eurozone deteriorates further.
"Encouragingly, and also in keeping with the CIPD's view, the OBR concludes that there is little evidence of a permanent structural deterioration in the labour market and that the structural unemployment rate is around 5.35%. This is good news in that it suggests that unemployment can fall quite rapidly once the economy returns to a strong rate of growth, which incidentally implicitly undermines the Chancellor's argument that the UK needs a major dose of employment deregulation to stimulate job creation. The bad news, however, is that with economic growth remaining sluggish for some time to come the OBR expects unemployment to remain above 2 million until the middle of the decade, which will put downward pressure on earnings growth across all sectors of the economy for several years to come."
And Ian Brinkley, director of The Work Foundation, added: "The Chancellor has signalled some of the right long-term priorities - investment in infrastructure, support for enterprise and more help for young people.
"However, there is little that will put demand into the economy in the short-term, and the longer term measures outlined are too small in scale. There is still too much reliance on a spontaneous revival of the private sector.
"There are huge risks this forecast will turn out worse than expected. The OBR's outlook on jobs and unemployment looks far too optimistic. Unemployment is likely to get higher and remain higher than the forecasts assume."
