Talking over the baying calls from the benches of the House of Commons, a beleaguered Alistair Darling delivered a ‘Budget for jobs’ last week. Heralded as the fix for the labour market, recruiters were glued to their screens.

But will the billions of pounds in the country’s coffers be spent in a way which will help your business?

Martin Hesketh, managing director of accountancy and business services firm Brookson, told Recruiter the Budget had been “a mixed bag” for the industry.

On the positive side, he welcomed financial support for job creation measures, in specific industries such as house building and in green industries such as offshore wind farms. “This will feed through to the recruitment industry in demand for both temporary and permanent staff,” said Hesketh.

Darling’s decisions on how to spread a thinning cash pile also included several provisions for jobs and training.

Some £1.7bn will be poured into the Jobcentre Plus network, on top of the £1.3bn announced in the pre- Budget report in November. Every
person under 25 who has been out of employment for 12 months will be offered training to ensure they are not “abandoned to a future on the scrap heap”.

However, recruiters are sceptical about the impact. Catherine Johnstone, owner of commercial recruiter Catherine Johnstone Recruitment, told Recruiter the move was well intentioned, but misplaced. Johnstone feels competition in the labour market will mean it is hard for these workers to get positions.

“They [the government] have to take action to stop them getting into the position of being long term in the first place. The temporary market can be used to give them valuable experience, but often they can’t take job offers because they are afraid of losing their benefits.”

Recruiters fear increasing tax increases for higher earners will damage motivation and stall the executive market. The Budget announced measures to increase the tax rate for those earning more than £150,000 to 50% will be brought forward to the 2010-11 tax year.

Albert Ellis, chief executive of international technical recruiter Harvey Nash, told Recruiter the increase would mean candidates would demand higher pay packets, slowing the senior job market as clients adjust salaries and the UK becomes less attractive for these personnel.

“Where you have got companies having to compensate candidates for the higher tax rate slows the process down and creates barriers to employment,” he said, adding entrepreneurs within the industry would also be negatively impacted.

Doug Baird, managing director at executive recruiter Interim Partners, told Recruiter he felt the tax rate increase was largely politically motivated. “Do I like it? No. People in recruitment want to earn that much and incentives should be given to encourage them to do it.”

The Budget singled out the renewable energy sector for increased funding, answering cries for investment from the sector which has been hit by a decrease in the amount of available finance (recruiter.co.uk, 27 March).

The Chancellor has promised £525m of new funding for offshore wind, £405m of new funding for low carbon energy and advanced green manufacturing, and up to four carbon capture demonstration projects. “I am presenting the world’s first ever carbon budget,” said the Chancellor.

Ari Richardson, director of energy sector recruiter Connect Resourcing, told Recruiter: “From a recruiter’s perspective it is a good attempt at injecting confidence in the energy market and the longterm out look is good. However, there’s going to be a huge skills gap and people need to be aware of that now.”

The biggest complaint from recruiters is one of inaction. Many feel the government could have done more to help an industry which has spent the last year at the sharp end of labour demand and will play a crucial role in the upturn.

Andy Hogarth, chairman and chief executive at blue-collar recruiter Staffline, told Recruiter the budget was effectively a nil-nil draw for the
industry and that the government should have looked at payment terms.

“The government is now paying on 14-day terms, which is all well and good if you are dealing with them, but recruiters are facing longer payment terms and the government needed to do something to get this cash flowing through the system.”

Ian Jermin, an equity analyst at John East & Partners, told Recruiter: “The Budget is not going to be particularly positive for the staffing market. It does nothing to dispel negative sentiment. Staffing companies will have to cut their costs in line with their lower revenues.”

The effects on the staffing sector have varied, with the only real winner being energy sector recruiters. The executive sector faces dwindling take-home pay for its perm candidates and the money to prevent long-term unemployment may be misplaced.