The UK Government faces significant challenges as it seeks to drive economic growth and raise living standards. Inflation may be falling, but the cost of living and doing business is set to remain high for the foreseeable future.

The labour market has loosened over the last six months but vacancy levels remain high, above pre-pandemic levels, and many employers report ongoing difficulties in addressing skills shortages. Skills and labour shortages continue to be worsened by economic inactivity due to ill health.

There is also the ongoing problem of endemically weak business investment. Addressing these issues requires a focus on policies that can support job quality and labour market participation to maximise the health and potential of the working-age population.

In our submission to the chancellor, we have called for three areas of focus for the Government to include in the Spring Budget:

1. Develop a high-quality, locally delivered business support service to help small businesses improve their people management capabilities and skills investment
2. Reform the apprenticeship levy into a more flexible training levy that would enable employers to develop existing staff through other forms of accredited training and skills development.
3. Reform and enhance Statutory Sick Pay and improve access to occupational health services, in order to support employee health and labour market participation.