Chancellor’s ‘meets the moment’ Budget sets sights on a more level UK economy

The government’s Build Back Better policy document, released yesterday to coincide with the Budget, focuses on three pillars of investment, which will act as a foundation for the economic recovery, while aiming to unite and level-up the country. It will focus on infrastructure investment; improving skills; and driving innovation.

Writing in the policy document, Rishi Sunak, Chancellor of the Exchequer, states: “Our most important mission is to unite and level up the country.”

The government believes that central to ‘levelling-up’ is the need to improve skills, as differences in skill levels provide a key part of the explanation for differing output and wages across regions.

The report notes: “Differences in levels of ‘human capital’ between places and regions, i.e. education, skills, health, are an important explainer of differences in regional outcomes. Research finds that up to 90% of area-level disparities in wages can be explained by the distribution of high-skilled workers.”

By focusing on boosting regional productivity, where it is lagging, job opportunities and wages should improve.

The Chancellor has begun this plan by announcing a new regional hub for government, in Darlington. In his Budget speech, he said: “If we are serious about wanting to level up, that starts with the institutions of economic power.”

But what does this mean for reward and employee benefits professionals?

The government’s push for re-skilling, lifetime learning and apprenticeships all indicate the need for businesses to invest in their workforces to drive up innovation across the whole country. Businesses may need to change their workforce planning to create more robust internal talent pipelines, and in turn adapt their reward strategies to retain employees with whom they have invested.

In future, learning and development opportunities may be more valuable to employees than traditional benefit offerings, while regional pay weightings may become less important as the local population upskills.

Levelling up undoubtedly has benefits for organisations and employees alike. However, it remains to be seen whether these aspirations will be fulfilled. 

For more on the changes announced in the Budget read our weekly round-up of news stories.

The author is Dawn Lewis, content editor at REBA.