Marketing trade bodies lament government’s ‘missed opportunity’ to address skills crisis

Following today’s budget announcement, which unveiled skills funding, business rates relief and changes to alcohol duties, the DMA, MRS and AA are calling on the government to better support industry-led training programmes.

Three of the UK’s marketing trade bodies and professional associations are calling on the government to help resolve the digital skills gap by backing industry-led training programmes, as chancellor Rishi Sunak announced his autumn budget this afternoon (27 October).

The Data & Marketing Association (DMA), Market Research Society (MRS) and Advertising Association (AA) argue the government is “missing a huge opportunity” if it does not allocate a specific budget to trade associations, which are “best placed” to understand the skills employers need most.

In today’s announcement, Sunak promised to drive a “skills revolution” with an overall investment of more than £2bn. Approximately £1.6bn of that spending package will be for the rollout of ‘T-levels’ for 16 to 19-year-olds. The government’s new vocational qualifications developed to meet the needs of industry, T-levels will be equivalent to three A-levels.

An additional £550m is to be invested in adult skills through the Skills Fund by 2024-25. This fund offers short courses and “skills boot camps” for adults who have no qualifications beyond GCSE level.

On top of that, there will be a further £170m allocated towards apprenticeships and training.

Earlier this week, Sunak told BBC One’s Andrew Marr Show “more sector-oriented training schemes have been shown to be really powerful”, and “the best way to get to a high wage economy is to improve people’s skills”.

While welcoming the investment, the marketing organisations believe the government can do more and are proposing that a portion of the increased funding for the National Skills Fund should be dedicated to industry-led qualifications to help fill thousands of immediate job openings.Marketing job vacancies more than triple since height of pandemic

“The government is missing a huge opportunity to reduce the vast digital skills gaps that exist across the economy,” says the DMA’s CEO Chris Combemale. “Trade and professional bodies are best placed to help with their strong industry connections and understanding of the skills that employers require most.”

All qualifications and training schemes provided by trade and professional associations have been developed “by employers, for employers”, Combemale adds. “Crucially, these employers have the jobs that need filling immediately and trust the quality of training provided by their industry association.”

According to Jane Frost CBE, CEO of the Market Research Society, the recovery and growth of the research sector is also being jeopardised by a shortage of skills, with companies in the sector – particularly SMEs – being priced out in a “bidding war” for talent.

Indeed, in the battle to attract talent, many businesses are offering increased remuneration packages to marketers, with some upping senior salaries by as much as 50% according to one recruitment specialist.

“The need to solve this is immediate and reskilling older workers is vital,” says Frost. “We offer a safe place where older workers can retrain with others like themselves in immediately saleable skills without the potential stigma of ‘going back to college’.”‘A hot commodity’: Why brands are struggling to hire marketing specialists

The Advertising Association’s CEO Stephen Woodford adds that a £1 spent on advertising generates £6 of GDP, urging government to ensure the industry has the necessary skills so it can continue to contribute towards economic growth and help businesses recover from the pandemic.

According to the Chartered Institute of Marketing, more than three-quarters (77%) of marketing employers have reported a skills shortage among their workforce. CEO Chris Daly says this “critical skills gap” has been exposed by the radical digital transformation of the industry, adding that marketers must be provided with “21st century skills” and lifelong development support if they are to succeed in an “ever-changing” landscape.

The budget continued: inflation and fuel

As he detailed the contents of the government’s autumn budget, Sunak revealed that the Office for Budget Responsibility (OBR) has revised its forecasts for UK economic growth upwards, anticipating gross domestic product (GDP) to expand by 6.5% this year compared to the 4% it forecast in March.

GDP will therefore return to pre-Covid levels at the turn of the year, the OBR predicts, with next year’s growth forecast to hit 6%. The OBR has also revised down its estimate of the long-term scarring caused by the pandemic, from 3% to 2% of GDP, signalling that Covid-19 will cause less permanent damage to the economy.

However, the chancellor said the budget “does not draw a line under Covid” and warned of a challenging few months ahead.

Inflation has hit 3.1% and is likely to rise further, with the OBR anticipating consumer price inflation to average 4% over the next year. Sunak blamed the rise on increasing demand for goods and the global challenges which have emerged as a result of the world opening up post-pandemic, including supply chain disruption and the doubling of wholesale oil, coal and gas prices.Consumer confidence ‘derailed’ amid petrol and energy crises“The pressures caused by supply chains and energy prices will take months to erase,” Sunak said. “But where the government can ease these pressures, we will act.”

He announced new funding to improve lorry park facilities and extended the heavy goods vehicle (HGV) levy for a further year until 2023. The government is also freezing vehicle excise duty for heavy goods vehicles.

Sunak also declared the planned rise in fuel duty will be cancelled over 2022-23 because, with fuel prices at the highest level in eight years, he is “not prepared to add to the squeeze on families and small businesses”. This is the 12th consecutive freeze, meaning the average tank of fuel will cost £15 less per car compared to pre-2010 plans, as well as £30 less for vans and £130 less for HGVs.

Overall, this will amount to a saving over the next five years of almost £8bn, Sunak claimed. The chancellor also said he had written to the governor of the Bank of England today “to reaffirm their remit to achieve low and stable inflation”, adding that it has a “strong track record” so people should be “reassured”.

Business rates relief

With businesses under pressure from such inflation, Sunak said next year’s planned increase in the multiplier will be cancelled, equating to a tax cut for business worth £4.6bn over the next five years.

The chancellor also promised to make the business rates system “fairer and timelier”, with more frequent revaluations every three years. The new cycle will be delivered from 2023.

As called for by the British Property Federation and the Federation of Small Businesses, the government is introducing a new relief to support green technologies. Until 2035, plant and machinery used onsite for renewable energy will be exempt from business rates altogether.

The government is also introducing “business rates improvement relief”, as recommended by the British Retail Consortium and the CBI. This means every business will be able to make property improvements and pay no extra rates for 12 months from 2023. Together, these two investment incentives total £750m.

Additionally, Sunak said he wanted to “help those businesses hardest hit by the pandemic”, and has therefore confirmed a new 50% business rates discount for the retail, hospitality and leisure sector, lasting for one year.

“Pubs, music venues, cinemas, restaurants, hotels, theatres, gyms, any eligible business can claim a discount on their bills of 50%, up to a maximum of £110,000,” he said.

The tax cut is worth almost £1.7bn and alongside Small Business Rates Relief, Sunak said over 90% of all businesses in these sectors will see a discount of at least 50%.

Overall, business rates have been cut by £7bn, the biggest single-year cut to business rates in 30 years apart from Covid reliefs, the chancellor claimed.

However, the British Retail Consortium (BRC) has described the budget as a “mixed bag”, declaring that it does not do enough to reduce the “burden of costs” bearing down on shops and the high street.

While pleased to see property investment and green relief programmes, the 50% business rates discount for 2022-23 will “do little” to support the majority of retailers. The BRC has therefore predicted an “unnecessary loss of shops and jobs”, which is “bad news for every member of the public”.

Alcohol duties

Later, Sunak declared the “most radical simplification of alcohol duty” for over 100 years, as he introduced a new system of six duty rates on alcohol. The stronger the drink, the higher the rate, meaning some stronger alcohols will become more expensive, but weaker alcohols like rosé and beer will be cheaper.

Duty is also being cut on fruit ciders to bring them in line with apple ciders, as well as on sparkling wines, which the chancellor claimed are no longer the preserve of the wealthy. The cuts will mark the biggest cuts to cider duty since 1923 and the biggest cut to beer duty for 50 years, he claimed.

The government is missing a huge opportunity to reduce the vast digital skills gaps that exist across the economy.

Chris Combemale, Data & Marketing Association

Sunak also announced a new “small producer relief”, including for the first time craft cider makers, and a “draught relief” to help pubs bounce back after the devastating impact of the pandemic. This will apply a 5% cut to duty on draught beer and cider served from draught containers over 40 litres.

This is not a temporary measure, but a “long-term investment” in British pubs of £100m a year, he said, leading to a permanent cut in the cost of a pint by 3p.

Finally, Sunak cancelled the planned increase in duty on spirits, wine, cider and beer from midnight tonight.

“Our reforms make the alcohol duty system simpler, fairer and healthier. They help with the cost of living while tackling problem drinking. They support innovative entrepreneurs and craft producers,” he said.

Following the announcement, shares in UK pub chains have jumped, the Guardian reports. Shares in JD Wetherspoons are up 5.5%, while Mitchells & Butlers (which owns the All Bar One and Toby Carvery chains) gained 4%.

Innovation and talent

The chancellor also spent time discussing innovation, a key area he wants to invest in for the future economy. He said he will maintain the target to increase research and development (R&D) investment to £22bn.

Alongside a new global talent network launching in the Bay Area of Boston and Bangalore, the government’s ‘Scale-Up Visa’ system will make it quicker and easier for businesses to bring in the highly-skilled individuals they need, he added, helping the UK to “identify, attract and relocate the best global talent in key science and tech sectors”.

The scheme is part of plans to make the UK’s visa system for international talent the most competitive in the world. “An economy built on innovation must be open and attractive to the best and brightest minds,” Sunak added.