By Lea Pachta

The CIPD today welcomes support for the young unemployed and the introduction of measures to tackle public sector pension costs, contained within the Pre-Budget Report, but has called for:

• A jobs guarantee to be extended to older jobseekers
• The scrapping of the “tax on jobs” increase in employers’ National Insurance Contributions (NICs), particularly in the wake of the new increase in employees’ NICs
• A more fundamental review of public sector pay and pensions policies

Guaranteeing jobs for young and old alike:

Gerwyn Davies, Public Policy Adviser at the Chartered Institute of Personnel and Development comments:

“Modest increases in unemployment in recent months mask the growing challenges faced by jobseekers, particularly if they are young and have been unemployed for more than six months. We therefore wholeheartedly welcome the reduced qualifying period for the jobs guarantee for 18 to 24 year olds.

However, with the jobs market still flat on its back, the challenges facing older workers are set to worsen in the coming months. We therefore urge the Chancellor to urgently consider extending the jobs guarantee to ensure over 50s who have been unemployed for more than six months are given the real help they need to get back into work.”

National Insurance Contributions increase:

Charles Cotton, Reward Adviser at the Chartered Institute of Personnel and Development, says:

“The Chancellor would have done better to use any increase in employee NICs to scrap the planned increase in employers’ NICs from 2011. This tax on jobs will hit at a time when we are still likely to be in the early stages of a ‘jobs light’ economic recovery — this is not the tonic a sickly labour market needs.”

Public sector pay and pensions:

Charles Cotton, Reward Adviser at the Chartered Institute of Personnel and Development, says:

“We would have preferred a 1% cap on the public sector pay budget as a whole, to better allow managers to increase pay rates for key jobs where there are shortages and for those who are high performers, while freezing them where there is no market reason.

“However, the government is missing a trick by solely focusing on pay freezes and cuts. While these measures will reduce the size of the total pay bill, they will not deliver for taxpayers a public sector payroll spend that is any more effective. To get real value for money in the public sector, government needs to firmly link employee pay to service delivery and performance.

“We welcome attempts to reduce public sector pension costs. However, capping the contribution level and making higher earners contribute more will not significantly reduce the cost burden and risk that taxpayers have to shoulder. What is needed is a more fundamental review of what is sustainable in public sector pensions, to ensure the cost and risk is more equitably shared between taxpayers and tax-funded workers.”

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