The latest employment statistics, released by the ONS last week, showed a 0.1% decrease in the unemployment rate.

In the quarter ending February 2012, 2.65 million people were without a job in the UK, a quarter-on-quarter drop of 35,000. Despite this, there were around 170,000 more people without a job than there were at the corresponding time last year, an ONS spokesman said.

It is thought that the increase can in some ways be attributed to a rise in the number of people accepting part-time rather than full-time positions.

The latest report also showed that base salaries rose by 1.6% in the 12-month period, but bonus awards in the first two months of this year were lower than they were in January and February last year.

The FPB believes that the employment rate would rise further if the government stuck to its promise of cutting red tape for small business owners. Phil McCabe, the Forum’s senior policy adviser, said the coalition needs to reduce bureaucracy and improve the tax system if Britain’s small businesses are to stimulate the jobs market.

David Cameron is relying on small businesses to drive economic growth but they need incentives, he added. The FPB has repeatedly asked the government to extend the National insurance Holiday to all firms and not just those in specific areas of the country. Furthermore, Mr McCabe would like employment law simplified so that employers have more control when it comes to staffing decisions.

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The National Loan Guarantee Scheme may be just the thing to help small businesses access cheaper finance and create more opportunities for umbrella company contractors.

This government initiative will help businesses with a turnover of less than £50 million. Chancellor George Osborne says that banks would be guaranteed a total of £20 billion for unsecured borrowing. The hope is that this will encourage our financial institutions to pass cheaper lending options to their customers, thereby promoting business growth.

The coalition has promised to help SMEs get access to cheaper funding. Project Merlin failed to meet its targets for small business lending and the Chancellor is now relying on this new nationwide scheme to deliver on the government’s promise.

He explained that the UK has low interest rates because of its credible deficit reduction plan and the government now wants to make sure SMEs can benefit from these low rates.

If the NLGS helps small businesses to expand, umbrella company contractors could well benefit from an increased demand for their services. SMEs are still reluctant to hire permanent staff because of the continuing economic uncertainty in the Eurozone. However, they will need to take on more people if they intend to grow and freelancers with the right skills will be able to step in and help.

The FPB has welcomed the Scheme. Phil McCabe said we badly need to see a change in bank/business relationships in this country, whereby lending decisions are made on a local basis by bank managers who actually know their customers.

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After last week’s disappointing jobs statistics showed that youth unemployment is still increasing, the REC has called on the business community to become involved in proactive initiatives such as the Youth Employment Charter.

The latest figures from the Office of National Statistics show that 973,000 young people are without a job, a month-on-month increase of 78,000.

Tom Hadley, the director of policy and professional services at the REC, said that while is the overall situation is one of concern, youth unemployment is one of alarm. The REC continues to push the government to come up with tangible measures, such as giving employers an NIC holiday if they take on young people, but the business community also has a major role to play.

The Youth Employment Charter aims to raise awareness and aspirations among future workers through co-operation with colleges and schools and by highlighting instances of how recruiters are making a real difference.

Meanwhile, David Cameron is urging MPs to get out and about in their constituencies and experience day-to-day life in a small business.

The FPB has set up the Business Buddy Scheme to help politicians gain an insight into the problems facing the small business community. Oliver Letwin, the Cabinet Office minister, has already taken part by visiting Bridport Gourmet Pies who are based in his constituency in West Dorset.

The PM says he has also been visiting small businesses in his constituency in West Oxfordshire and he praised the diversity of the businesses that range from cutting-edge design to specialist shops and renewable energy companies.

Cameron wants the UK to be entrepreneur friendly, but to achieve that the government has to understand the issues SMEs face on a regular basis. Armed with that information, the coalition hopes to ensure that entrepreneurs receive all the help they need to start off and grow a successful business.

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The Migration Advisory Committee has said the UK economy could be permanently damaged if the government persists in restricting immigration for skilled workers from outside the EU.

In April this year, the coalition put in place a permanent cap on the number of skilled immigrant Tier 1 and Tier 2 visas. The Tier 1 (General) category disappeared and in its place we have a Tier 1 (Exceptional Talent) category, but hardly any applicants meet the requirements. A cap of approximately 21,000 was put on Tier 2 visas for people who have received the offer of a job from an employer in the UK.

Damian Green, the immigration minister, said the government plans to reduce the number of immigrants to tens of thousands rather than hundreds of thousands.

However, the Migration Advisory Committee has now said that when the UK reduces the number of non-EU skilled migrants by 10,000, the UK economy loses more than half a billion pounds. This could be disastrous for an economy such as ours that it still trying to recover from the 2008 global economic crisis.

The report went on to suggest that the present levels of non-EU migrants with Tier 1 and Tier 2 visas have a positive impact on GDP per capita. They make a positive contribution to public finances and have an important role to play in the provision of health, education and social services.

Furthermore, the Committee said that immigration cutbacks would not be spread evenly and could severely impact certain sectors.

The REC has been quick to respond to the question of employment-related settlement. The UK Border Agency launched a Consultation asking for opinions on granting indefinite leave to stay to Tier 1 and 2 visa holders who come to work in the UK.

Gillian Econopouly, the head of public policy at the REC, said UK employers must be able to access the best global talent and recent initiatives to create a flexible immigration system for entrepreneurs and exceptionally talented workers are particularly welcome. However, she pointed out that the Consultation proposals close off settlement routes and a result, the UK might become less attractive to highly skilled workers.

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The CIPD has said that everyone should be entitled to flexible working rights, not just parents and carers.

The government has set a deadline of 2015 for the introduction of flexible working for everybody and this must be adhered to if the UK is to avoid a two-tier workforce. Organisations of all sizes get genuine benefits from flexible working, the CIPD pointed out in its reply to the coalition’s consultation on Modern Workplaces.

Mike Emmott, the CIPD’s employee relations adviser, said that a lot of employers are now willing to consider flexible working requests from any member of staff. They realise the benefits of helping their staff achieve the type of balanced work – personal lifestyle enjoyed by workers such as umbrella company contractors.

What concerns the CIPD is that the government is considering exempting micro-businesses and new start-ups from these proposals. Excluding any business from employment regulation could lead to a two-tier labour market and discourage small businesses from expanding.

Emmott went on to call on members of the CIPD to support the proposals for shared parental leave. He said the current division of caring responsibilities is unlikely to shift unless parents are allowed to share leave and pay.

The EEF, the manufacturers’ organisation, also supports flexible working but does not believe that it should be a universal right. Tim Thomas, the organisation’s head of employment affairs, said flexible working is widespread in the manufacturing sector and further regulation is unnecessary. However, the government should simplify its proposals on parental leave, he added.

The REC has also responded to the consultation by suggesting that flexible working does not just apply to permanent jobs. A lot of people opt for a temporary role, simply because it does provide the flexibility they need to balance their personal commitments.

Gillian Econopouly, the REC’s head of policy, said the government needs to increase flexibility whilst keeping the burden of regulations low. Businesses and employees should be encouraged to work together to devise flexible working arrangements that are mutually beneficial.

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Umbrella company contractors may be interested to learn that MPs do not accept HMRC’s excuse that problems with implementing NPS were to blame for poor standards of service.

The Commons Select Committee welcomed the Revenue’s admission that service standards were unacceptable but said issues surrounding the standard of service have been going on more many years and the department could not use the implementation of the new NI and PAYE Service as an excuse.

The Committee expressed its disappointment that HMRC had not done more to develop performance indicators that give a realistic view of customers’ end-to-end experience even though its predecessor committee had recommended such action be taken in 2007.

The report highlighted three areas of concern in the service standards provided by HMRC. These were access to telephone advice, response to postal enquiries and offering offline alternatives to online filing and assistance.

MPs also pointed out that HMRC’s claim that it had saved £1.1 billion without negatively affecting its performance lacked credibility. The committee found that its witnesses were nearly unanimous in their opinion that the decline in the standard of service was linked to budget cuts.

The Committee has called on the coalition to refrain from making any further cuts to HMRC’s budget.

Mike Clasper, the chairman of HMRC, did admit that things did not run smoothly for much of 2010 and claimed the department had been working extremely hard to improve things this year. More calls are now handled immediately and the mail backlog has reduced by half. Things still aren’t as good as the department would like, but they are much better than they were last year, he added.

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Vince Cable has announced that the coalition intends to scrap or simplify in excess of 160 onerous regulations to free contractors and small businesses from unnecessary bureaucracy.

The business secretary said that in order to achieve sustainable economic growth in the UK the government has to reduce the number of regulations companies have to contend with. Previous governments have promised to do exactly that but the Red Tape Challenge proves that the coalition is serious and that real progress is being made.

Business owners have been posting their comments and suggestions on the Red Tape Challenge website and complaints have been raised about the complexity of certain regulations as well as some overlapping with others.

Cable also said this was just the beginning of the coalition’s plans and urged businesses to continue expressing their opinions and creating new jobs.

Last week’s initial Red Tape Challenge findings focused on the retail sector but they do confirm the broader campaign to rid industry of unnecessary rules and regulations. The employment relations minister, Edward Davey, confirmed the government’s agenda last week when he spoke at the launch of the updated AWR Toolkit from the REC.

The director of policy and professional services at the REC, Tom Hadley, said the UK needed to remove barriers to growth and the latest GDP figures highlighted the urgency for this. He went on to suggest that the Conduct Regulations for recruiters should be reviewed.

The REC is also concerned about the effects of the AWR and the extra administrative burden it will place on recruiters. Although the UK’s hands are somewhat tied as these regulations come from the European Union, we must ensure we do not get any more similar offerings from Brussels, Hadley added.

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The Times newspaper recently asked readers to rank the UK against five key competitors for tax, business friendliness, infrastructure, skills and workforce.

It will probably come as no surprise to learn that voters ranked the UK last when it came to personal and business taxation. In fact that UK didn’t come out smelling of roses many categories!

On the plus side, 57% of respondents believe the UK is a better place than France to do business, and 56% said it is better than doing business in India. Voters were also reasonably positive about the British workforce’s skills and the quality of education, although Germany and France ranked higher.

On the down side, 70% believes the UK performs worse than the US on personal taxation and 75% says it has worse wealth creation taxes. In fact a mere 6% of the respondents said were happy with the rates of personal taxation in the UK and only 7% said corporation and capital gains taxes were good or excellent.

The US, China and Germany were all ranked above the UK when it comes to setting up and running a business. 23% said the UK was a good place to set up but 30% said it was either poor or very poor.

However, the UK coalition wants to make Britain more small business and limited company contractor friendly and plans to open up more contracts to smaller firms. The government has also been trying to crack down on the issue of late payment to help small businesses better manage their cash flow.

The CBI welcomes the coalition’s moves but warns that smaller firms still have a number of obstacles to overcome. Chief policy director, Katja Hall, has urged SMEs to focus on the long-term outcome when they bid for public sector contracts. To compete with the larger players, SMEs must think about the outcomes and what it is they hope to achieve.

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The FSB recently welcomed the news that unemployed dropped by 88,000 and that a similar number of people entered the workplace.

The vice-chairman of the Federation’s Peterborough branch, Amir Butt, said the increase in employment was good news but it is now important to continue the trend and encourage entrepreneurs to set up businesses and offer small firms incentives to increase their workforce.

Small businesses want to hire more staff and they would be willing to do so if only the government would reduce payroll costs. The coalition must put an extension of the National Insurance contributions holiday at the heart of its growth plans in order to continue reducing unemployment.

Chris Grayling, the employment minister, says more work still needs to be done. The latest figures are encouraging and its good news that employment is increasing. Compared to this time last year, there are now an additional half a million people working in the private sector, he pointed out.

He went on to say that unemployment among young people is now lower than when the coalition took up office.

The ONS data shows that public sector employment decreased by 24,000 in quarter one 2011. Local government departments shed 27,000 jobs whilst central government actually increased its workforce by 4,000. However, when you remove the temporary staff who worked on the 2011 census from the equation, public sector employment fell by 39,000 to 6.14 million.

According to the ONS report, regular salaries, excluding bonuses, have risen by 2% in the past 12 months, whilst total pay, including bonuses, rose by 1.8%.

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The Royal College of Surgeons warns that government cutbacks have led to some hospitals using inexperienced locum surgeons as consultants. As well as a lack of experience, the organisation says some foreign locums do not have a good grasp of the English language.

The president of the College, John Black, said the problem is compounded by the European Working Time Directive, which states that people must not work more than 48 hours per week on average. Locums are supposed to be short-term hires but in some instances NHS Trusts have been employing them for up to five years.

To help hospital trusts ensure consultant surgeon meet the required national standards, the RCS has produced a report entitled Locum surgeons: Principles and Standards. This enforces the principle that locum surgeons should only undertake tasks which they are fully trained and experienced in.

The report points out that locums are generally employed to relieve the pressure on existing staff. Locum consultants should be on the specialist surgeon register, or within six months of qualifying for inclusion, the report says. Furthermore, trusts should not extend the appointment of a locum surgeon for more than 12 months.

Fully qualified permanent surgeons are best placed to provide long-term cover because they provide stability through in-depth knowledge of their department.

Gillian Econopouly, the head of policy at the REC, said we need to understand the reality behind hiring locums. They ensure that staff shortages do not lead to a decline in standards and without them, waiting lists will grow.

Since the coalition came into power last year, there has been a 55% increase in the number of locum vacancies and a corresponding 55% increase in online applications. NHS Trusts spent £232 million on surgical locums in 2009-10, a massive increase on the £119 million spent in 2007-08.

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The REC has called on the Department of Business, Innovation and Skills to provide increased clarity over the way the AWR will operate in the education sector.

The BIS recently confirmed that it would not be publishing agency workers’ regulations that were sector specific. This news prompted the REC to seek talks with the government and it has already begun consulting some of the country’s leading legal firms to find out how tribunals will view specific requirements.

Tom Hadley, the director of policy and professional services at the REC, said the AWR poses the education sector with some unique challenges and many questions remain unanswered.

For example, the current guidelines do not clarify whether the school or the local education authority is deemed to be the hirer. Neither do they effectively deal with the impact of school holidays on the qualifying period of 12 weeks.

The Confederation will provide regular updates on its talks with the coalition and external law firms to members of its Education Sector Group. Hadley pointed out that these are complex regulations and the REC will do everything it can to make sure there is no confusion for supply teacher agencies and schools.

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Lord Oakeshott, the former Liberal Democrat Treasury spokesman has accused the UK banks of hindering the economic recovery by refusing finance to small enterprises and charging extravagant rates when they do.

Official data from the Bank of England shows there are huge discrepancies between the interest rates paid by large firms and their smaller counterparts. An SME is charged an average interest rate of 3.69% on a £1 million loan, but a large organisation borrowing in excess of £20 million, pays only 1.78%.

Lord Oakeshott says this approach is making a mockery of attempts to solve the lending crisis. This data is gruesome proof that the banks are choking the UK’s economic recovery. The coalition must put pressure on the banks immediately if it wants to prevent small firms seizing up.

The BBA reported recently that net lending to companies dropped by £4.7 billion in March after a drop of £4.6 billion the month previously.

The Central European Banks have also reported that despite a slight improvement recently, businesses still struggle to obtain finance. This news led the chairman of Success Strategy, John de Groot, to advise British entrepreneurs to think about different ways of getting finance including approaching family and friends.

He explained that banks look at a wide variety of factors when a business applies for a loan. These include the applicant’s credit rating, motivation, viability of a proposal and the amount of money the entrepreneur will contribute to fund that proposal. If smaller firms cannot satisfy these requirements, borrowing from friends and family could prove to be a better alternative.

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