Will the Chancellor’s Spending Review create new jobs?

Yesterday Chancellor of the Exchequer Rachel Reeves delivered her Spending Review, setting out budgets for Government departments.

Here our expert Work Avenue team give their response to four proposals which could impact our clients currently looking for work.

Skills and training investment: The Government is committing billions in funding for training courses and AI plans. This includes a record investment amount – £1.2bn a year by the end of the spending review – to support more than a million young people into training and apprenticeships. There is also a further £2bn being invested in an AI action plan.

Our response: Any new funds that go towards training and upskilling, especially in an area of huge growth potential such as AI, are welcome. These opportunities are ideal for many of our clients – from young people looking to enter the workplace through to those who need to reskill or boost their prospects in today’s competitive jobs market.

Public sector boost: The Chancellor’s flagship announcement was a £29bn a year increase in spending on the NHS. There was also further public sector investment in areas including defence and border control.

Our response: This is good news for our clients targeting public sector roles, especially in the NHS. However, other departments – such as the Home Office, Foreign Office and Department for Transport – are facing real-terms budget reductions or efficiency targets. While these are not outright cuts, they could still lead to a squeeze on jobs.

Infrastructure and housing projects: The Government has promised huge multi-year investments in housing, transport and construction, including £39 bn for social homes, plus rail and energy projects. The Chancellor confirmed approval for the Sizewell C nuclear power station that Ministers say will create 10,000 direct jobs and thousands more in connected businesses.

Our response: This will see a rising demand for businesses in the engineering, construction and project management sectors, and therefore more business and job opportunities for clients in those fields.

Further tax rises expected: With spending increasing, many analysts predict further tax rises could come later this year – though none were announced in this review. This follows last October’s increase in employer National Insurance contributions.

Our response: Only this week, new figures showed that 276,000 jobs have been lost since October, with the National Insurance rise seen as a key factor. Many firms are being cautious in their hiring – meaning fewer private sector vacancies for the time being.