CIPD jury out on Browns skills, jobs and pay measures

Todayís pre-Budget report contains a range of employment policy measures that are in principle welcomed by the CIPD. But as Chief Economist John Philpott comments, while the Chancellorís statement is rich in promise he will need to deliver on his skills and jobs agenda.

Skills
John Philpott, CIPD Chief Economist, says, ìThe interim report of the Leitch review provides a useful analysis of the UKís skills deficit. However, much of the content of the report is familiar ñ the key test of the review will be the detailed recommendations it makes in its final report next year, in particular the balance of responsibility between Government, employers and individuals to meet the skills challenge. What also needs to be stressed ñ and here the interim report is silent ñ is that an increased supply of skills on its own will not be enough to improve the productivity of UK plc. Increased investment in skills will only pay off if these are used along with a wider battery of people management practices.

ìThe CIPD welcomes the Chancellorís announcement that the Employer Training programme is to be extended nationally. But the government should continue to avoid any pressure to place employers under a statutory responsibility to train employees in basic transferable skills.î

Public sector pay and efficiency
Philpott continues, ìThe Chancellor is right to stress the need to place firm control on public sector pay. In this respect it is encouraging that there will be a new single gateway for major public sector pay decisions, including consideration of the pensions implications of pay awards. Public sector employees deserve decent reward but should not be treated more favourably than their private sector counterparts.

ìAlso encouraging is news that the government appears to be on target to meet the Gershon efficiency savings. However, it is early days in the efficiency drive and there is still limited evidence on the degree to which there is a genuine shift in available resources to front line service delivery. In particular, the CIPD remains sceptical that the target driven approach to reform will enable the hoped for productivity and performance improvements to be achieved.î

Regulation
Philpott continues, ìThe Chancellorís statement on regulatory reform represents a step in the right direction, though it takes a leap of imagination to believe that he will be able to make sufficient progress on this front with the core EU member states.

ìIt is also far from clear that the new Business Review will be a proper substitute for the original Operating and Financial Review. Despite the favourable words in the pre-Budget report about what the Business Review should cover, there is little to suggest that this will enhance reporting of human capital management practices, which are crucial to raising productivity.î

Welfare to work
Philpott adds, ìThe Chancellorís laudable instincts on welfare reform are once again in evidence in his tough but tender approach to helping young unskilled people and lone parents back into work. The pre-Budget report measures should help in part to address the problem of the Vicky Pollard generation ñ ill educated and often unemployable youths. This group of core jobless need to be targeted at present by policy measures not least because they are losing out to migrants in the search for available jobs.

ìIronically, another group of jobless people competing with migrant workers are the UKís ethnic minorities. It is vital that they are helped to overcome barriers to employment and the CIPD is delighted that the Chancellor is to establish an advisory Commission of private sector business leaders to tackle race discrimination in employment. The CIPD advocates, however, that the Commission takes a fully comprehensive approach and examines all the relevant diversity issues involved.î