Government plans for a “national loans guarantee scheme” to help small businesses could prove to be of little help to smaller recruiters, according to Sean O’Donoghue, founder/UK group managing director, the Independent Recruiting Group (IRG).

At this week’s Tory party conference, chancellor George Osborne announced plans for a “national loans guarantee scheme”, under which the state would underwrite new corporate loans.

But O’Donoghue told Recruiter: “I think one of the things that Mr Osborne is trying to achieve in his party conference speech is to give some reassurance to Britain’s businesses that, if the banks are still reticent to lend to the private sector then, the government is going to try and help out – in this instance by offering business loans that come with lower associated borrowing costs than businesses might achieve from the banks.

“This is something that they first mentioned in opposition under the name National Loans Guarantee Scheme and could be a way of bringing billions and billions of pounds to companies looking for a cash injection. It sounds like a great idea as the whole process is meant to be fiscally neutral so it won’t even affect the government’s balance sheet and should help maintain the UK’s AAA credit rating.”

Unfortunately, he doubts this will directly affect small independent recruiters. He explained: “There is a very similar scheme in the US, which only really works for ‘smaller’ companies (not true SMEs) who are looking to raise sums of money of £10m+, which is far more than the average turnover of our members.

“This is an issue that [we expect] more detail on in due course from the Treasury and I think only then will we see if Mr Osborne’s plans have any direct bearing on our members. There is, of course, the point to make that as recruiters we are linked to every single business market in the UK and so an increased level of lending [to see more businesses, more ideas, more manufacturing and more construction projects get off the ground] would be of benefit to all of us indirectly.”

However, plans to increase the qualifying period for unfair dismissal, also announced by the Chancellor at the conference, have been welcomed by Liz Longman, managing director of the independent recruiters’ network, The Employment Agents Movement (TEAM).

“We are aware from TEAM’s involvement with BIS as to this government’s apparent determination to reduce red tape and bureaucracy for business. The announcement by George Osbourne to increase the qualifying period for unfair dismissal claims to two years is certainly a step in the right direction.

“From an initial poll of our members it is seen as a positive move for employers and will certainly assist many who might have been reticent to commit to a new hiring as well as helping to reduce the amount of potentially spurious claims to Tribunals. Quite rightly employees remain protected by discrimination regulations and we await with interest further details with regard to how transitional arrangements will be introduced.”