The Treasury’s Spending Review consultation requested feedback on government spending priorities and suggest policy ideas that could inform decisions about departmental budgets and resource allocation over the multi-year spending review period. 

We believe the spending review is an opportunity for the government to further develop and broaden its vision for growth. In our response, we highlight the need for improvements in skills development, innovation and productivity in workplaces across the economy, not just the key high growth sectors. 

Our recommendations for government: 

Improving skills development 

  • Ensure early consultation with employers on the design of the new Growth and Skills Levy.  
  • Introduce an Apprenticeship Guarantee which would provide a level 2 or level 3 apprenticeship for all young people aged 16-24 
  • Establish financial incentives for SMEs of up to £2,000 per apprentice, on top of existing incentives, for hiring young people aged 16-24 years old, to boost apprenticeship opportunities in small firms 
  • Allocate £75m to help schools to work with business in providing two weeks’ work experience for year 10 and 11c secondary school students  

 

Boosting innovation adoption 

  • Update the UK’s innovation strategy with a much stronger focus on boosting innovation adoption across the economy  
  • Invest £40m to establish an accessible business support service to help SMEs develop the skills and capabilities needed to boost innovation and growth. 
  • Fund a limited number of ‘workforce productivity pilots’ to develop innovative approaches to public sector people management and technology adoption  
  • Abolish the Patent Box and allocate some of the £1.5bn saved to supporting policies on improving workforce skills, management practices and technology adoption   

 

Improving the regulatory environment  

  • Develop a code of conduct on collective employment relations  
  • Double Acas’s budget from £60m to £120m a year to boost its ability to advise employers and individuals on people management, workplace conflict and employment rights. 
  • Invest £50m in establishing a new Partnership Fund to strengthen sectors bodies’ ability to support improved collective employment relations at an industry level 
  • Increase the Central Arbitration Committee’s annual budget to £1.5m a year  
  • Increase the budget for administering the Employment Tribunal and Employment Tribunal Appeal services by £20m a year  
  • Invest an estimated £100 million a year to increase the number of labour market enforcement inspectors to one per 10,000 workers 

 

Read our full response

Our response to the 2025 Spending Review consultation
PDF document 162.4 KB

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