Budget Includes Measures To Ease Labour Market Shortage
The budget includes several measures to ease the labour market shortages including the expansion of free childcare hours, ‘returnships’ for over-50s, and more support for people with disabilities or long-term health conditions.
With the number of new jobs adverts last month at a 14-month high, we take a look at the Chancellor’s budget plans.
Changes to Childcare
The cost of childcare recently has been so high that some parents left their jobs, as it was more cost-effective for one parent to stay at home with the kids than have both parents working while paying childcare fees.
To help parents Jeremy Hunt unveiled a £4 billion package in his budget plans to expand free childcare to parents. All children over nine-months old, will be eligible for 30 hours a week under the new scheme, the same as three- and four-year-olds. To support parents on Universal Credit move into work or increase their hours, the treasury is increasing the amount of UC support for childcare costs by almost 50% and will pay this upfront instead of in arrears.
Families will now be able to claim £951 for 1 child & £1,630 for 2 children.
Encouraging over 50s back to work
The government’s budget plans are targeting over-50s in its mission to fill outstanding vacancies which are stifling business’s plans for growth. Jeremy Hunt introduced further measures to encourage those who have taken early retirement to return to work.
The government’s “midlife MOT service will help people to assess their financial situation before retirement. Apprenticeship-style programmes, called “returnerships”, will help people aged over 50 to learn new skills and return to work.
Tax free allowance on pensions increases
In addition the tax-free allowance on how much someone can save into their pension pot before they are hit with a tax charge has also been increased. The annual allowance will be increased from £40,000 to £60,000.
The tax-free allowance was a particular problem in the NHS, which has seen doctors and consultants retiring early, reducing hours, or turning down overtime for tax reasons.
Commenting on today’s Budget plans, Kate Shoesmith, Deputy Chief Executive of REC, said:
“The announcements today go some way towards considering how we overcome labour shortages – but it needs to be at the very heart of the government’s growth strategy. And business must respond by putting people and staffing issues at the top of their agenda.”
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