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October 28, 2021

How will the Autumn Budget impact the Future of Work?

The budget and spending review included some steps towards a ‘good jobs economy’ but fulfilling the promise of good work, better skills and higher wages across the country will require sustained focus and more substantive investment across Government departments.

The Chancellor has recognised jobs as a key element of our recovery and taken steps to promote some of the key aspects of our Good Work Charter, particularly in raising the national living wage to £9.50 an hour. However, pay is still set to fall in real terms, with mid- income earners in the frontline as they face inflation combined with tax rises.

A Work Strategy is needed to optimise commitments

To follow up the Budget, the Cabinet Office needs to move swiftly to address challenges in our fast-changing labour market and plan for the future and initiate a Work 5.0 strategy. The Strategy should aim to boost pay, conditions and quality of work together, aligning and optimising commitments made across Departments to build a new ‘good jobs’ economy.

In the run up to the budget, our specific proposals included initiating a national strategic ‘Good Jobs Audit’, introducing a ‘Good Work First’ pledge for public procurement, aligning technology policy with labour market and industrial policy around the Good Work agenda, incentivising Good Work and expanding the commitment to Good Green Jobs.

Addressing the UK’s skills mis-match

We welcome the increase in adult skills investment, with £554m for adult skills for the Department of Education, even though the investment gap has not yet been closed and details on how this fund will be spent are awaited. We are pleased to see significant funding increases for AI skills training, with the Chancellor doubling of AI and data scholarships, although hope this commitment will extend to AI training for workers outside existing AI specialists, as recently modelled by Finland.

Although there is a striking overall increase of £84 billion in central departmental spending, investment in the Department of Work and Pensions was less encouraging, with day-to-day spending down by an (inflation-adjusted) 40% on 2009-10 levels, according to analysis from the Resolution Foundation. Only £10m per year has been allocated to supporting workers in transition between sectors in a Sector-Based Work Academy Programme. The Chancellor has offered some additional support for older workers with £20 million over the next three years to help workers aged 50 return to or remain in work. This is encouraging for this frequently neglected demographic, who are susceptible to the adverse effects of automation. These measures are first, important steps in the right direction.

Aligning technology with labour market policy

Given the importance of science and technology investment in the Autumn Budget, the Government will need to align technology policy with labour market and industrial policies as soon as possible. We welcome the Online Safety Bill but urge the Cabinet Office, DCMS and BEIS to work together and adopt a more holistic, and robust, approach to technology regulation to achieve the goals of the National AI Strategy and competition law review and shape responsible technology adoption more widely. As part of this approach, we would like to see the impacts on good work and jobs across the UK considered across these entry points.

Improving labour market intelligence for future budgets

We are encouraged to see that £294m has been allocated to the UK Statistics Authority in 2024-25. This will fund new core statistics (which should include a technology survey) and a new Labour Market Survey to improve labour market intelligence and the availability of cross-cutting data across government. This is something IFOW has repeatedly recommended, including in evidence we provided to the Work and Pensions Committee. We believe more detailed labour market statistics will help trace the impacts of technological disruption on people and communities across the country and inform the development of more granular policies in response to new future of work trends.

Building on the Budget, this data should inform more substantive investment to support the growing numbers of workers in transition and build the adaptability and resilience of communities across the country. The Pissarides Review into the Future of Work and Wellbeing, supported by the Nuffield Foundation, will incorporate the new statistics as part of our exploration into the implications of automation technologies and how they are transforming work, society and the economy in the UK.


Institute for the Future of Work


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