With unemployment rising, getting individuals – and importantly, keeping individuals – in work is vital when it comes to stimulating and stabilising the economy as we emerge out of the Covid-19 crisis. This issue was confronted head on when Rishi Sunak took to the podium earlier this month to deliver the 2021 Budget and announced a number of measures which should be of particular interest to recruiters as we all look towards a brighter 2021.
Termed a Plan for Jobs, the announcement heralded a two-fold approach which sees an emphasis on both the retention of existing employment positions, as well as incentives to encourage companies to create new opportunities.
As many predicted, the Coronavirus Job Retention Scheme (CJRS) has been extended, meaning companies can continue to furlough workers for whom there is insufficient work until the end of September. The scheme has been instrumental in protecting employees, safeguarding employment, and easing the financial burden on employers during the past 12 months, and is a vital component in boosting business confidence.
The extension of the furlough scheme will undoubtedly provide an element of stability and security to employers and employees alike as we enter another spring until lockdown measures, however, as we progress along the roadmap out of these restrictions, the focus is shifting towards providing initiatives which will help boost recovery through the creation of new jobs, particularly at entry-level.
Two such schemes which were announced at the Budget are as follows:
- Cash incentives will be given to those employers who take on new apprentices has been increased to £3,000 for each apprentice hired between 1 April 2021 and 30 September 2021. Employers can take advantage of this scheme regardless of the age of the apprentice
- An additional £126 million will be given towards work placements and training for 16-24-year-olds across England
While these schemes are directly targeted at employers to encourage them to recommence their hiring activities, Sunak announced several other measures which will have a huge impact on companies’ ability and desire to increase their staffing numbers over the coming months.
- Restart Grants – £5bn will be made available in the form of grants which will be given to those sectors which have been particularly badly hit by the pandemic. This includes pubs, bars, restaurants, gyms, and beauty salons who will each receive a non-repayable grant of up to £18,000. Non-essential retailers will be able to claim £6,000 per premise
- Restart loans – Qualifying SMEs will be able to apply for a government-backed loan between £25,000 – £10m (depending on their turnover) to help them kick-start their business activities, plug gaps in their cash flow, or expand their workforce
- VAT cuts – The reduced 5% VAT rate will be extended until September, followed by an increase to 12.5% for the following six months, before a return to the standard rate of 20% in April 2022, for those within the hospitality and tourism industries. Business rates relief will also continue for retail, hospitality, and tourism companies until the end of June, followed by nine months of discounted rates.
After 12 months where uncertainty has presided over almost every business in almost every sector, it is no surprise that many have chosen to effectively pause their companies – including their recruitment activities – until the long-term became slightly clearer.
The announcement of the roadmap out of lockdown, coupled with the promises made at the Budget, however, should go some way to instilling employers with the confidence they need as we emerge from restrictions. For many this will mean ensuring they have adequate staffing levels in order to service the pent-up demand which is likely to be felt in certain sectors particularly those which have been closed to the public for so long, such as hospitality and leisure or the tech industry where demand continues to grow.
David Tattersall is Head of Client Relations at Handpicked Accountants. With over 35 years’ experience in professional services, David has particular expertise in finance, accountancy and corporate insolvency.