Autumn Budget 2024: A call for skills and innovation investment

The Budget this week will be a pivotal moment for the government to signal how it intends to deliver on its ambition to improve growth and living standards, while supporting public services and balancing the fiscal books. 

To help realise these aims the budget will need to help set the direction for a new economic strategy that can help increase growth and productivity across all sectors and regions of the UK, while supporting the transition to net zero.  

If reports are correct, kickstarting growth will have to be done against the headwind of an increase to employer National Insurance Contributions, while businesses will also have to adapt to the measures in the Employment Rights Bill as they are implemented over the next two years. 

This means there is an even more urgent need for the government to make the necessary changes to public policy to support employers in investing more in the skills and wellbeing of their workforce and in technology adoption. 

Skills reform

CIPD has highlighted the need for Skills England to consult meaningfully with employers on the design of the new Growth and Skills Levy to ensure it can help boost apprenticeship provision for young people, support employers in upskilling their workforces and tackle critical skills shortages.  

We are also calling for the government to build on its Youth Guarantee and introduce an Apprenticeship Guarantee to provide an apprenticeship opportunity at level 2 or 3 for all 16–24-year-olds with the necessary minimum qualifications. According to our research, almost 90% of employers would support this.  

We’d also like to see improved pre-apprenticeship training and new incentives for small firms to encourage them to take on apprenticeships.

Innovation

We also need a rethink on innovation policy, with a much stronger focus on accelerating the spread of management best practice and technology adoption across all sectors of the economy.  

While the UK performs well on innovation on a range of measures, new CIPD research highlights that where we underperform is ‘innovation diffusion’, where new technology and management best practice is poorly adopted across the economy as a whole.  

Consequently, we’re calling for a new £50m social partnership fund, which sector bodies can use to improve their ability to support collective employer action to improve management capability, skills development and technology adoption at an industry level.  

We’d also like to see a review of publicly funded business support as a first step to developing a cost-effective, accessible business support service that can provide high-quality advice to SMEs on the capabilities needed to boost innovation and growth.  

Additionally, the CIPD wants to see the government fund a limited number of public sector ‘workforce productivity pilots’. These could help trial and develop innovative approaches to improving people management and technology adoption in public service delivery. 

Enforcement

We are encouraged by the government’s commitment to ongoing consultations on the Employment Rights Bill as part of its broader Make Work Pay initiative. However, beyond establishing a Fair Work Agency, the government must take further steps to improve labour market enforcement and support employer compliance. 

Improving enforcement will require a comprehensive strategy that includes the work of the Health and Safety Executive and the Equality and Human Rights Commission. Additional funding will be required for more labour market inspectors and measures to improve the employment tribunal system.  

CIPD has also called for Acas’ budget to be doubled to £120m a year to support its ability to advise and support employers – particularly SMES – to comply with new regulation and ensure the system overall can play a much stronger role in raising employment standards.