The Government has published this year’s Budget, identifying it as “a Budget for growth”. A key theme is encouraging people to return to the workforce given the significant number ‘absent’ due to long-term sickness, caring responsibilities, and early retirement. The package of new measure’s also aims to facilitate people to work until much later in life.
In this article we summarise the headline proposals that will impact employers.
With the Chancellor highlighting that more than 2.5 million workers are currently economically inactive due to disability or long-term ill health, the government has announced key measures aimed at enabling disabled people to return to work and supporting people through periods of ill health. These include:
The government has confirmed that funding will be expanded in relation to the upcoming subsidy pilot for occupational health services. The subsidy scheme is understood to apply to small and medium-sized employers, although the eligibility criteria are not yet clear.
Further, two new consultations on how best to increase occupational health across UK employers will be published, exploring both regulatory options and tax incentives.
Occupational health support can play an important part in effectively managing employees’ ill-health absence. We highlighted the benefits of a strategic action plan when it comes to managing employee ill health in our previous articles available here.
Key changes to the current pensions’ regime to support older workers to remain in the workforce include:
An enhanced digital midlife MOT will be made available to those over 50, providing financial planning, health and career guidance ahead of retirement. Further, the over-50s will have access to “Returnships”, a refined group of skills programmes with focus on flexibility and previous experience to facilitate a path back into work.
In a move that is designed to remove barriers to parents working, the Chancellor has confirmed that working parents in England will be able to access 30 hours of free childcare per week, for 38 weeks of the year, from when their child is 9 months old to when they start school.
The new entitlement will be rolled out in three stages:
If childcare is needed for more than 38 weeks per year it will be possible to spread the free hours entitlement over a higher number of weeks.
A further package of childcare measures involves additional funding to increase the hourly rate payable to current childcare providers, an adjustment to staff-to-child ratios to expand available childcare, and start-up grants for new childminders seeking to join the profession.
In recognition that school hours do not dovetail with a normal working day, local authorities in England will also receive £289 million over two years, starting in September 2024, to expand the provision of wraparound childcare in schools.
Further, parents on universal credit who are moving into work or increasing their working hours will receive childcare funding upfront instead of having to claim it back after the event, which is the case under the current system. In recognition of the increasing cost of childcare to working parents, the maximum childcare support available through the Universal Credit will also increase to £951 for one child (up from £646) and £1,630 for two children (up from £1,108).
Various measures will be introduced to increase work coach support and work search requirements for many people in receipt of Universal Credit, in a further move aimed at encouraging people back into the workforce. Broadly, these include:
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