This month we have seen the usual increases to statutory payments for April, along with Jeremy Hunt – Chancellor – announcing his Spring budget. Further details are outlined below. The Bank of England has also increased its interest rates again in the aim to control inflation, adding more pressure on the budgets of households and businesses. Let’s start with the Spring Budget.
This budget focuses on delivering three of the five key priorities set out by the Prime Minister in January: to halve inflation, grow the economy and get debt falling. To achieve this the Chancellor’s strategy is to deliver long term sustainable growth, focusing on four key priorities: Employment, Education, Enterprise and Everywhere.
As a result, a comprehensive employment package has been announced which is focused on four groups: the long-term sick and disabled, welfare recipients and the unemployed, older workers, and parents. So here goes, this is what is in-store in more detail:
Universal support’ scheme to help the disabled into work
The government has recognised that more needs to be done to support people accessing or returning to work who are economically inactive due to a disability or long-term sickness. The government report that there are more than 2.5 million people inactive due to longterm sickness. The government have made a commitment to address the barriers that stop people who want to from working by introducing a suite of measures under a Universal Support programme in England and Wales. As a result, a new voluntary employment scheme for disabled people and those with health conditions has been implemented. This scheme will match participants with existing job vacancies and support them into work. The government will spend up to £4,000 per person to find them a suitable role and cater to their needs, supporting 50,000 places per year once fully rolled out.
So is your client’s workplace environment / operating practices accessible and inclusive for all? While reasonable adjustments should be tailored to each individual employee, clients should be reviewing their working processes, actively promoting positive action tools, especially in their recruitment process, managing of sickness absence, and capability policies and procedures . Opportunities for potential employees which previously would have been barriers, such as working from home , remote working is now being encouraged more so than ever. Covid has created evidence that businesses can adapt and offer adjustments whilst maintaining or enhancing performance. The excuse of a ‘business reason’ is becoming narrower and limited.
To support employers and address the leading causes of ill health related inactivity, the Chancellor has announced a £406 million investment plan targeted at services for mental health and musculoskeletal conditions.
Does your client have support in these fields such as free counselling / health plans as a benefit? Do they have a relationship with a supportive occupational health provider that can advise on reasonable adjustments?
It is worth mentioning that the government plans to bring forward two new consultations on how to improve “instant availability” of occupational health as they recognise their key role in making the overall mission a success. The good news is that they are set to double the occupational health funding for SMEs.
Moving forward with increased funding , I’m sure we will see opportunities to work beside supporting charities and third parties within these fields. If you know of any, please do share.
For supporting our clients now, I would recommend visiting the Disability Confident page on the DWP website for further information. Disability Confident is a government scheme designed to encourage employers to recruit and retain disabled people and those with health conditions.
Apprenticeships for over 50s
The government are launching a new type of apprenticeship called Returnerships.
Returnerships are targeted at adults over the age of 50 who are returning to work or seeking a career change. This is a new offer bringing together three programmes, including: Apprenticeships, Skills Bootcamps and Sector-Based Work Academy Programmes (SWAPs).
Skills Bootcamps are free and are designed to work with local employers to help fill job vacancies. These flexible courses last up to 16 weeks and allow potential employees to gain the in-demand skills employers are looking for, with the offer of a job interview on completion.
An apprenticeship is a job with training that can be used by learners of all ages and all career stages to gain valuable skills, retrain or re-skill.
Sector-based work academy programmes (SWAPs) enables potential employees an opportunity to learn new skills and get experience of working in a particular industry. The programme is designed to help jobseekers, who are claiming either Universal Credit, Jobseeker’s Allowance (JSA) or Employment and Support Allowance (ESA), to build confidence, improve job prospects and enhance CVs.
For our clients, like apprentices, returnerships may have different rights attached affecting the type of contract, pay and benefits such workers will receive. This is currently a grey area until the government publish more details.
Furthermore, expectations and needs of over 50s may vary from younger workers. This is something our clients need to consider ensuring they are attractive as an employer. There may also be barriers / extra cost to benefits such as health insurance premiums varying from a younger worker.
Unfortunately, the cost of childcare in the UK is such that for many lower-paid workers there has been no financial benefit in going back to work before a child turns three years old.
Mr Hunts announcement this month is set to bridge that gap between the end of maternity/ shared parental leave and the start of funded nursery care for three and four-year-olds by offering the following free childcare:
- April 2024: 15 hours of free childcare for working parents of two-year-olds
- September 2024: 15 hours of free childcare for working parents of children aged nine months to three years
- September 2025: 30 hours of free childcare for every child over the age of nine months with working parents.
Schools and local authorities will also be funded to increase wraparound care, tackling the barriers caused by the current limited availability for parents of school-age children.
This could be a game changer for many employees with parental responsibilities and therefore a refresh on family friendly policies maybe required. Will parents be seeking top up childcare benefits for the hours not covered by funding or will parents now be seeking to only work 4 day weeks. Will companies start to offer wrap around childcare vouchers as a benefit to encourage employees to work longer days. Will clients wish to reduce their enhancement maternity pay schemes covering a 12-month period to 9 months as a way of getting employees to returner earlier. Also, consideration to temporary contract changes/ amendments to cover settling in sessions at nursery and breast feeding. Will this also mean that grandparents will now be looking to get back in to part time work as they are released from caring for their grandchildren? Will larger companies introduce nurseries attached to the office to encourage people attend the office rather than work from home? It will be interesting to see how the change will impact the desire and needs of parents/ those with childcare responsibilities.
And finally …
As mentioned in my previous Horizon, here are the statutory payment increases for national and living wage:
|Rate from April 2023||Current rate (April 2022 to March 2023)|
|National Living Wage||£10.42||£9.50|
|21-22 Year Old Rate||£10.18||£9.18|
|18-20 Year Old Rate||£7.49||£6.83|
|16-17 Year Old Rate||£5.28||£4.81|
To make sure that your client is compliant, a full review of all salaries should take place before the April 1st deadline. As a reminder, please ensure that there is a process in place for when a member of staff moves from one age bracket to another throughout the year.
In addition , please note that the limits in relation to unfair dismissal/redundancy pay are increasing as follows:
England and Wales unfair dismissal/redundancy pay: From 6 April 2023, the limit on a statutory week’s pay will increase to £643 (up from £571). This means that the maximum statutory redundancy payment and unfair dismissal basic award will be £19,290. The cap on the compensatory award for unfair dismissal will increase from £93,878 to £105,707.