Chancellor Rachel Reeves used the Statement to detail further welfare cuts, beyond those pre-announced, and also emphasised that more work needs to be done to clamp down on tax evasion – targeting a 20% increase in those charged with evasion.
She also explained that a voluntary redundancy scheme will be launched in the civil service as part of the pre-announced plan to make the state “leaner and more agile".
The Spring Statement was delivered against a backdrop of the Office for Budget Responsibility (OBR) halving the country’s growth forecast for 2025 from 2% to 1%, although it was upgraded for the remainder of the parliament.
Read more: Amended Employment Rights Bill: What HR needs to know
Kevin Fitzgerald, managing director of HR and employee engagement platform Employment Hero, stated that Reeves announcements did not bring any certainties for businesses.
He told HR magazine: “For HR leaders across the UK, today's Spring Statement presents significant challenges rather than solutions. The continued rise in employer costs without offsetting support measures means difficult decisions lie ahead.”
HR leaders will likely have difficulties in retaining talent in the current economic climate, Fitgerald added.
He said: “Without policies that specifically incentivise hiring – especially for those returning to work from being on benefits – HR leaders will struggle to balance growth ambitions against rising costs.
“The government has missed an opportunity to create a partnership with businesses that could address both fiscal challenges and the approaching milestone of one million young people not in education or employment."
Read more: Potential national insurance increase drives concern
Ben Willmott, head of public policy at the CIPD, was equally disappointed with yesterday's announcements.
"We were disappointed to see no recognition of the need for more support for employers. They are about to be hit by the hike in employer national insurance contributions and increases to the national minimum wage and are already bracing themselves for the additional burden of adapting to a raft of new employment laws," he told HR magazine.
“Together these changes mean organisations will have less money and capacity to develop managers, train staff and support technology adoption – the activities that can drive the improvements in productivity the UK desperately needs."
Willmott also added that the the CIPD hopes to see the government setting out an implementation plan to help employers adjust to the new laws stated in the amended Employment Rights Bill.
He said: “The government needs to set out a clear implementation plan to help employers plan for the new laws and commit additional resources to Acas to improve its capacity to advise businesses, particularly SMEs.
“We also need to see consultation on the design of the Growth and Skills Levy fast-tracked so it can start helping employers train staff, tackle skills gaps and shortages and boost the adoption of AI and other technology.”
Chris Williams, people and culture director at HR and employer of record provider Mauve Group, echoed yesterday’s announcement might bring with it some challenges.
Speaking to HR magazine, he said: “The upcoming increases in national insurance costs, combined with the rise in the national minimum wage, are likely to disproportionately affect SMEs. To manage rising costs, businesses will need to closely evaluate headcount, workforce development strategies and efficiency measures.”
However, Williams added that there was some better news. He said: “A positive takeaway from the statement is the announcement of apprenticeships for those over 50. HR professionals have long been concerned about age discrimination and its impact on the older workforce.
“Given the current urgency to address skill shortages across the UK, these new apprenticeship opportunities will be a welcome addition for both HR professionals and employers seeking to tap into a broader talent pool and encourage older workers to remain in or rejoin the workforce.”
