Budget 2009: What the papers say

Personnel Today brings you a round up of what the papers say ahead of today’s Budget, expected at 12:30pm. For full live coverage of the Budget broken down into employer-related and HR topics, visit Personneltoday.com from 12:15pm.

Employment:

The Budget 2009 is widely expected to be ‘a Budget for jobs’, with the focus on enabling companies to avoid further redundancies and prepare for the upturn. Earlier in the week, the Guardian predicted one of Darling’s core announcements today will be a £2bn package aimed at helping the unemployed back into work. This money will be spent on expanding the range of Jobcentre Plus services and the launch of a new scheme offering 18- to 25-year-olds, who have been out of work for 12 months, the guarantee of jobs, training or work experience.

The Financial Times last night reported the centrepiece of this scheme will be a £1bn two-year 1980s-style community work programme to get under-25s out of the dole queue and into work. The programme is expected to provide funding for local authorities – amounting to £6,000 per worker – to encourage them to take on 250,000 young people in low-skilled work, including filling potholes, lagging lofts and clearing derelict land. The funding will cover the minimum wage for part-time work over six months.

The paper added that private companies in sectors such as social care will also be given one-off subsidies of up to £1,500 for taking on eligible jobseekers.

Skills and technology:

The provision of training and skills to help the UK upskill its workforce is expected to form a large part of the Budget today, but with no specific measures having yet been leaked, this remains perhaps the most secretive part.

However, in an interview with Sky News yesterday, Lord Mandelson insisted ministers and politicians should work more closely with the private sector to improve training and ensure that investment in science, research and skills is “tailored to the needs of the real economy”. Mandelson also said a national apprenticeship system would be developed to help keep young people in education and prepare them for the workplace. These measures could be announced in the Budget.

Public sector cutbacks:

Alistair Darling is widely reported to be gearing up to announce deeper cuts to public spending than originally planned through “efficiency savings”, with cuts worth £10bn expected, in addition to the £5bn already announced.

The Times said the chancellor could back recommendations from advisers that government departments start saving £5bn a year, rising to £15bn annually by 2013-14, which could lead to thousands of civil service job cuts.

The five external advisers are thought to have made efficiency suggestions including cutting office space by 30%, through hot-desking, halving the size of the Land Registry and preparing the Royal Mint for whole or partial sale.

The Financial Times has reported one government adviser has called for Whitehall departments that fail to make savings in back-office functions, such as HR and finance, to “have their money taken away from them. The adviser estimated the government could save £4bn of the £18bn spent on back-office functions across the public sector in the next three years.

In March, the Times revealed a letter sent by the Treasury to all Whitehall departments calling for cutbacks in a range of services, including HR, to save at least £5bn by 2010-11.

Short-time working subsidies:

Employers and unions have urged the government to consider introducing wage subsidies to support staff moved onto reduced working weeks as an alternative to redundancies. But despite similar schemes being used in Europe and in the UK during the 1980s, the Daily Telegraph reports the Treasury is reluctant to pursue this policy.

Green measures:

Last week, Gordon Brown announced the creation of 400,000 new green jobs by 2018 through a low carbon industrial strategy, and more details on these plans are expected to be contained in today’s Budget.

There is also talk of a £5,000 subsidy for buying hybrid and electric cars, but this will only be available from 2011-12, when the green car models will be launched.

The Guardian has reported that it expects the chancellor to announce an extra £500m of government spending on reducing carbon emissions, including a pledge of £40m to top up and keep open a grants programme for renewable energy technologies.

The Times added that the government is also considering the creation of an investment fund to offer growth capital to small and medium-sized start-up businesses focused on key strategic industries, including renewable energy.

Help for specific industries:

The Times has revealed the government is likely to announce a £1bn package to revive the construction industry. Under the new scheme, the Treasury will go into partnership with private companies to ensure housing developments that have not yet been started or have been abandoned due to the credit crunch are completed, providing a boost to the construction industry and reinvigorating housing markets.

As part of a £2bn package to assist the unemployed through the provision of training and work experience placements for 18- to 25-year-olds, the Guardian has revealed 50,000 placements could be made available in social care to help improve recruitment and retention problems in the sector.

Economy:

Chancellor Alistair Darling is widely expected to stick by his predictions that the UK will be out of this recession by the end of the year, however it is thought he will revise his predictions on how far the economy will contract, from his 1.25% contraction forecast in the 2008 Pre-Budget Report, to as much as 3.5%. City AM reported the chancellor will also concede that the government will borrow up to £180bn in 2009-10, compared to the £118bn predicted in November’s Pre-Budget Report.

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