On Wednesday, 26th March 2025 at 12.37, the Chancellor, Rachel Reeves, commenced her Spring Statement. The Chancellor delivered a comprehensive 43-minute statement to the House of Commons, which was punctuated by frequent interruptions, heckling, and jeering from opposition members – a typical scene of robust parliamentary debate. Despite the noisy atmosphere, she maintained her focus on outlining the government’s economic strategy, covering key areas such as defence spending, infrastructure, housing, and tax policy.
TAXATION
The Chancellor committed to no increases in national insurance, income tax, or VAT. She focused on combating tax evasion by investing in HMRC technology, increasing tax fraud discharges by 20%, and raising an additional £1 billion in revenue. This brings total tax evasion revenue to £7.5 billion. Her approach aims to ensure everyone pays their fair share while protecting working people from new tax burdens.
MAYACHI COMMENT – Whilst there were no new tax rises within the Spring Statement, there was also no sign of a reversal of the national insurance increase, which would affect most of the recruitment market from 5th April 2025.
EDUCATION
The Chancellor announced a £600 million investment in skills training, targeting the construction sector. This includes creating 10 new technical excellence colleges nationwide to train 60,000 workers. The initiative aims to support the government’s housing and infrastructure plans by providing vocational training opportunities. The broader goal is to help working people develop skills and create new pathways for young people to fulfil their potential.
MAYACHI COMMENT – This new scheme will help recruitment agencies in the construction sector by helping to create more skilled staff within the industry. Also, any recruitment agencies providing education staff in the technical colleges may see an increase in placements as this scheme is rolled out.
DEFENCE
The Chancellor announced a major defence strategy, increasing spending to 2.5% of GDP by 2027 with an ambition to reach 3% in the next parliament. Key commitments include £2.2 billion additional funding, a £400 million innovation budget, and 10% of equipment spending on new technologies like drones and AI. A new defence growth board will oversee reforms to procurement, making contracts more accessible to small businesses. Specific investments include £200 million for Barrow’s nuclear security, Portsmouth Naval Base regeneration, and improved military housing. The goal is to transform the UK into a “defence industrial superpower” while creating economic opportunities.
MAYACHI COMMENT – This investment is great news for recruitment agencies making placements within the defence sector especially those focused on new technologies. With red tape being removed to allow private companies to be able to supply on these new projects, agencies should try to identify who is winning these contracts to help supply the required staffing.
HOUSING
The Chancellor outlined ambitious housing plans, including significant planning reforms to boost house building. The OBR predicts these reforms will help build 1.3 million homes, reaching a 40-year high of 305,000 homes annually. The government will invest £2 billion in social and affordable homes, creating 18,000 new homes across various regions. These initiatives aim to deliver the manifesto promise of 1.5 million homes in England and support economic growth by addressing housing shortages.
MAYACHI COMMENT – This type of investment in the construction sector will be welcomed by the recruitment agencies placing staff to the building trade, which can often be an industry hit hardest by economic uncertainty.
NHS AND HEALTHCARE
The Chancellor briefly addressed healthcare, focusing on structural reforms rather than substantial funding increases. Key points included abolishing NHS England to redirect funds directly to patient services, driving NHS productivity improvements, and reducing costly agency spending.
MAYACHI COMMENT – With the Chancellor announcing a reduction in agency staffing, this will not help recruitment agencies in the medical sector, who have already had a tough time over the past 2 years.
