Budget Round-up: Hammond optimistic, but more needs to be done
Chancellor Philip Hammond unveiled a positive budget for UK Plc, but CMI’s Ann Francke and Petra Wilton say more needs to be done to close the UK’s perennial productivity gapMatt Scott
In his first budget announcement since becoming Chancellor, Philip Hammond has delivered an optimistic message for businesses looking to invest in the future.
Chief among these is £500m funding for the technical skills of 16-19-year-olds to help close the skills gap and boost productivity in the UK.
Announcing the funding, Hammond said: “Students need a much clearer system of qualifications… one that is designed and recognised by employers with clear routes into work, more time in the classroom, and good quality work placements.
“So today, we will invest to deliver, in full, these game-changing reforms. We will increase by over 50% the number of hours training for 16-19 year old technical students, including a high-quality three month work placement for every students, so when they qualify, they are genuinely work-ready.”
“Once this programme is fully rolled out, we will be investing an additional £500m a year in our 16-19 year olds,” he added.
Commenting on the announcement CMI chief executive Ann Francke said: “This is a Budget for boosting confidence with much welcome investment in skills, infrastructure and health. Particularly welcome is support for those entering the world of work, with an annual £500m investment in the technical skills of 16-19- year olds.
“It’s important that these new routes link into professional apprenticeship pathways.”
Petra Wilton, director of strategy for CMI, added: “For the UK economy to punch above its weight post-Brexit we need to start ramping-up the number of young people entering the labour force with work-ready higher skills. That’s why CMI welcomes the Chancellor earmarking £500m a year to support 16-19- year olds in technical education.
“According to our research, one-third of 16-21- year olds in the UK aren’t confident of finding a job in the next few years. Alongside championing the Government’s apprenticeship agenda, we support this transformation of technical education that will lay clearer career paths for those leaving school. But to deliver the highly skilled workers we’ll need to compete post-Brexit, these technical routes must be developed with employers and aligned with the new breed of apprenticeships.”
Hammond also revealed further details of the £23bn investment for infrastructure and innovation first announced in the Autumn Statement, including:
- £300m to support the brightest and the best research talent, including support for 1,000 new PhD places and fellowships, focused on STEM subjects;
- £270 million to keep the UK at the forefront of disruptive technologies like biotech, robotic systems and driverless vehicles;
- £16 million for a new 5G mobile technology hub; and
- £200 million for local projects to leverage private sector investment in full-fibre broadband networks.
Francke, however, argued that this is not enough to close the productivity gap that is pulling the UK down on the global stage, and called on Government to invest more in the nation’s leaders and managers.
“Investing £23bn in innovation and technology infrastructure is one part of the solution we need to boost UK productivity and profit from post-Brexit opportunities,” she said. “But it dwarfs the £13m the Chancellor pledged in his Autumn Statement for Sir Charlie Mayfield’s review to raising management skills. Poor management costs the UK economy £84bn a year in lost productivity, so for the tech investment to pay we’ll need skilled managers to lead the projects.
“And let’s not forget that today is also International Women’s Day. Greater gender balance in management is another big productivity booster, and CMI reckons we need another 1.5 million female managers by 2025 to achieve this. Extending the £500m investment in technical skills to support women returning from maternity leave, as well as young people, would be a welcome addition.”