Spending Review: Progress, Gaps and Future Priorities

Spending Review: What You Need to Know

Chancellor Rachel Reeves has delivered the much-anticipated Spending Review, setting out new initiatives designed to bolster growth and support public services. While some elements have been praised for their ambition, business leaders caution that the plans do not go far enough.

Essentials at a Glance

• Focus on investment in transport, energy, and green technology
• Long-term commitments welcomed by industry for stability
• Calls for more decisive workforce strategy and public sector productivity reforms

Neil Carberry, Chief Executive of the Recruitment and Employment Confederation (REC), was quick to respond. He noted the government's recognition that economic growth, not tax increases, is essential for funding vital public services:

You can’t tax businesses into growth, especially when those firms need to be investing. Any spending commitments made today rest on the backs of the future success of British business.

Key Announcements and Industry Response

Major Infrastructure Investment:
• Increased funding for transport aims to improve workforce mobility and close critical skills gaps.
• Commitments to long-term energy and technology projects are intended to provide businesses with reliable guidance for future investments.

Growth, but Only Halfway There

Carberry observed that while these announcements set a positive tone, they only get the UK "halfway along the track":

• Public service productivity needs to be addressed with bold, unwatered-down reforms, particularly in planning and workforce mobilisation.
• Businesses require more support in navigating regulatory and hiring challenges, especially surrounding the NHS and skills shortages.

The Missing Link: Workforce Delivery

Despite the clear emphasis on infrastructure and green policy, leaders were disappointed to see little mention of practical workforce development. Carberry highlighted the absence:

Despite talking about the need for a deep pool of talent, there was little on workforce today – yet we know this is the critical part of getting where we need to go without further tax rises.

Areas Identified for Improvement:

1. Apprenticeship Levy Reform: Though mentioned as an exciting prospect, business leaders await detailed proposals and practical reforms.

2. Workforce Strategy: The upcoming Industrial Strategy is seen as an opportunity to make workforce development a core economic objective, not just an employment issue.

3. NHS Staffing: Carberry stressed that more funding alone will not resolve the NHS workforce crisis. Quicker, more effective hiring processes and genuine partnership with the recruiting sector are critical.

Expert Insights

"Extra NHS funding won’t fix its staffing crisis. We have built a system where decision-making for any form of hiring into the NHS is glacially slow... A true partnership approach, rather than attacking an entire sector on poor evidence, is what is needed."

Carberry concluded that only by including the recruitment sector in a genuine partnership can the UK hope to meet its mid-21st-century workforce needs.

What Should Businesses Do Next?

• Stay Informed: Follow updates on the Industrial Strategy, apprenticeship reforms, and new public sector hiring policies.
• Engage Early: Businesses should share their feedback with policymakers and get involved in industry groups.
• Consider Talent Needs: Prepare for upcoming changes by reviewing your own workforce development and upskilling strategies.

Key Takeaway:

The Spending Review marks a step toward growth and stability, but tangible workforce initiatives remain the critical, unfinished task for government and business alike.