Published byREC

Prosperity comes from getting the people stuff right - REC

REC election manifesto identifies key steps to boost growth and pay, reduce taxes and improve public services. It all starts with engaging our workforce in the way they want to work.

The REC’s Manifesto Dynamic Labour Markets for Growth comes at a critical time. The UK jobs market has been remarkably resilient, but shortages, technological changes, skills shortfalls and lack of support for workers all hold British businesses back. Workers’ pay, and the government’s tax take also suffer. The impact of this is evident in poor productivity performance, and high levels of economic inactivity.

Neil Carberry, REC Chief Executive, said:

“It’s only by driving growth that we can build more of the successful businesses we need. Firms who pay people well, help to fund public services and bring the tax burden down. In a big, open, services-led economy such as the UK, real change takes all of the talents of these islands – creating opportunities to work, progress and innovate. This matters more now than ever before.

“Any incoming government needs to address the people stuff to make progress. For too long, our thinking in this area has been one-dimensional, and overshadowed by the ideas of the past or the dry gloom of think-tanks. But recruiters are optimists about work in Britain. If we can unlock the potential of our labour force, we could add £39bn of growth every year to our economy. Over a decade, that kind of premium would be truly transformative – more leading companies, better paid staff, more sustainable public finances and better public services. 

“This is all possible. But we need to stop the short-termism and engage with longer-term plans that build on the labour market we have, an understanding of what workers want, and honesty about some of the political trade-offs. Like immigration, where the political debate is actively helping to hamstring our economy right now.

“Our manifesto provides creative and robust policies to solve deep-rooted problems in the labour market caused by a smaller labour force, a skills system that isn’t meeting employer needs and businesses who are still too hesitant to invest. The manifesto takes a people-first approach, because when we enable our workforce to make a difference, we know they get the job done!”

Success for any new government will rest on unlocking the potential of the British people. In its manifesto, the REC says politicians need to:

  • Understand the labour market we have and the flexibility people want by acknowledging people want different forms of work, and welcoming that diversity of options. For too long Whitehall and Westminster have acted as though the only type of job that matters is a permanent job, employed full-time. A new government can underpin this by conducting the first Workplace Employment Relations Study in over a decade and building on it to deliver a genuine workforce plan for the UK. One that brings together a long-term and pragmatic set of options on skills, immigration, transport and other key issues.
  • Support our transition to new skills and new jobs by empowering local leaders to act on skills, in partnership with companies and local skills providers, such as colleges. But they must do this in a way that is always focused on the economy, We need to buttress this with the immigration policy we really need to drive prosperity – and be honest with people about the trade-offs. Alongside this, embedding skills of the future around AI and Net Zero in both our education system and our approach to business will be vital. An AI assurance framework designed to make the UK a world leader is a key step.
  • Act to support productivity and tackle inactivity by reforming the failed Apprenticeship Levy in the first 100 days to underpin a skills revolution. And supporting workers with transport and childcare policy that links to their needs. We also need to support more efficient public services though procurement reform which will save money and cut NHS waiting lists.
  • Ensure regulation is fit for the future by regulating to support workers however they work. That means finally delivering a well-funded Single Enforcement Body so that compliant firms are protected alongside workers from those who ignore the law. This should include regulation of the whole supply chain - especially umbrella companies and joint employment models. It means finally overhauling the rules around off-payroll working (IR35).

Among the REC’s policy suggestions is reform of public sector procurement processes to get better value for taxpayers and efficiency for service providers. For example, in the NHS, procurement price caps for temporary staff should be reviewed at least every two years, suggests the REC.

Neil Carberry added:

“NHS price caps on agency staffing have broken the market, with suppliers asked to fill shifts at rates that no medical professional will take. This drives greater use of higher cost options – from in-house banks to off-framework supply. The NHS is spending more for less – it could reverse this by working with staffing suppliers to build a sustainable market.

“Arrangements should be standardised across all staffing delivery structures to ensure value for money and a level playing field for suppliers and workers, who are critical to keeping services operational. Agency staff in the NHS are often the reason a ward can stay open, or an operation can go ahead. An incoming government should work in partnership with agencies to address issues of chronic health and social care staff shortages.”