2016 Budget – public sector recruitment market update

In March, George Osbourne announced the government’s 2016 budget and most observers would have noted some of the headlines affecting us all. The accountants amongst you will naturally be drawn to the calculator to work out the implications of an increase to the personal allowance and 40% tax thresholds, the introduction of a new ‘lifetime ISA’ by 2017, and how a ‘sugar tax’ might affect our weekly shop. Significantly, there were also numerous policy announcements that will have an impact on the public sector recruitment market in the years to come.

2016 Budget – public sector recruitment market update

Spending and growth

The government has announced plans to introduce a further £3.5bn of cuts to public spending by 2020. After another comprehensive spending review in 2015, this would no doubt have been greeted hesitantly by certain areas of the civil service, not least because of the staffing challenges posed therein, three of which we outline here. 
Firstly, the government is committed to ‘doing more with less’. Many departments and agencies face the challenge of attracting, and retaining top talent to implement and manage projects and significant change within an increasingly complex world. However, within the context of a candidate short market and increasingly confident private sector, achieving this is difficult. The Civil Service were unable to fill 72% of vacancies in 2014/2015.
Secondly, the government’s growth expectations forecast the creation of a million jobs by 2020. Given that most of these jobs will be created within the private sector, the challenges and competition posed to public sector recruiting could be exacerbated even further.
Finally, the Cabinet Office is still being challenged by public opinion in relation to the amount of spend on temporary staffing, despite it reducing by nearly half since 2010. 
Could a fresh approach and new plan be required on a macro level? Clearly, public sector recruiting as a whole will remain a challenge for employers, but presents an excellent opportunity for top talent looking to make a significant impact and develop their careers quickly. 

Future of the limited company?

As part of the government’s continued effort to crack down on tax avoidance, the budget also introduced measures to alter the way in which personal service companies are treated. Whilst it is too early to tell, this could have a significant impact on the interim recruitment market within the public sector, and depending on the results, potentially the private sector thereafter. We recommend that you seek your own advice to ensure that you are aware of the legislation relevant to your business.  

Market impact

The detail of numerous initiatives and policies have also been announced which will have various impacts across the wider public and not-for-profit sector. For the education sector, the plan for all schools to become academies by 2022 has received a mixed response but it could provide a good career opportunity for many professions as schools become independent from local government. Infrastructure projects including Crossrail 2, HS3 and road upgrades, signal a good opportunity for many who have developed their careers in similar specialist projects elsewhere.
Growth in house building programmes has also received significant publicity, but the consolidation of the social housing market has resulted in the social housing organisations being slightly more risk averse to hiring. Regardless, the fact remains that across all of these markets, change offers opportunity for careers in an interesting and challenging sector. 
For further insight as to how these changes may affect your hiring strategy or how you approach your career, please get in touch with the Michael Page Public Sector division. 
Owen Myers
T: +44 20 7269 2309
M: +447789081389