The July 2105 Budget and the research industry

There have been plenty of talking points around this year’s budget. Now that the dust has settled we have decided to look a bit closer to home and think about how all of this will impact the research industry.



The recent budget contained a number of measures which will potentially have a major impact on the future of school leavers in the UK over the coming years. Of these the most significant of these is the introduction of a new Apprenticeship levy for large employers.

The aim of the Apprenticeship levy (not perhaps the natural step for a Conservative party with a predilection for free market solutions) is to fund increases in apprenticeship numbers and quality (e.g. the pledge to create 3m new apprenticeships in the course of this parliament).

Although the nature of the levy is not yet clear (who will pay it and how much) from a research perspective the key questions appear to be:

1. Will the levy generate the required increase in apprentices, while also maintaining quality?

2. How will this vary across different sectors and at different apprenticeship levels?

3. What is the employer view on this?

  • Which employers will benefit from these changes?
  • What affect does the levy have on employer non-apprenticeship training activity, and hence their overall investment in training?

Having conducted extensive research on support for the training levy in the construction sector, on employer views on Apprenticeships and on employer investment in training, we look forward with interest on the government’s research programme in this area.

Student maintenance grants:

The replacement of the Student maintenance grant by loans is another stand out consideration in the education space and will undoubtedly have an impact on those considering the option of University. Currently, students from families with annual incomes of £25,000 or less get the full grant of just under £3,400 a year; more than half a million students in England receive the grant costing taxpayers more than £1.5bn annually. The government hopes scrapping the grant will reverse under-funding of universities, and stops the basic unfairness of taxpayers funding grants for people likely to earn above average salaries. Critics focus on social injustice and the fact that scrapping the grant will make university unaffordable and unappealing for those from the poorest backgrounds.

On this basis the overriding question for research must be what impact does the introduction of the loan have on student numbers, particularly on (planned) applications from low and middle income families?


Our recent blog challenging the stereotype of the benefit claimant discussed how the government may look to achieve its cuts of £12bn to welfare payments by 2018-19 – read our blog on here. This budget gives us a first look at how the government aims to approach these cuts. The flagship announcement regarding benefits from this year’s budget has been the new national living wage. This will see a reduction in the benefits provided to low paid workers but in turn businesses will be obliged to pay them a higher wage.

From a research perspective it will be interesting to consider what impact this will have on employment and the way in which employers recruit. It raises some interesting questions:

1. Will we see more under 25’s recruited as employers look to avoid paying the £7.20 living wage in favour of the standard £6.50 minimum wage?

2. Will we find employers recruiting individuals to work restricted hours – for instance, in retail or services, recruiting to cover narrower windows of ‘peak demand’?

3. Will it apply a ‘chilling’ effect to further recruitment, making employers consider more carefully whether to take on further staff?

A more difficult question to answer is whether the national living wage – like the national minimum wage before it – acted as a ‘default position’ that led some employers to pay less than they might otherwise have done –thus ‘flattening out’ wages paid, rather than acting as a ‘safety net’ at the bottom of the wage scale.


There have been a number of changes to taxation in this budget with adjustments being made to personal tax thresholds and a reduction to the rate of corporation tax.

Researchers will play a key role following:

1. The impact of the proposed rise in Personal Allowance

2. The Inheritance Tax threshold for individuals

3. The reduction of Corporation Tax and changes to the Annual Investment Allowance for businesses (the August round of our Business Omnibus will be assessing the reaction to the budget across businesses of all sizes and sectors to see what kind of impact these changes have had).

Insurance Premium Tax:

As part of this budget the chancellor also announced that Insurance Premium Tax (IPT) will rise from 6% to 9.5% from November of this year. It is very likely that the IPT change will not be picked up by the majority of people even though it will have a significant impact. To put it in perspective, from November over 20 million households that hold contents / buildings insurance or motor insurance will see their premiums increase (it is estimated typical car insurance will increase by between £12 and £15).

Premium increases are likely to become another barrier for insurance providers to overcome as they look to engage with an already frustrated client base. See our blog on recent insurance innovations.


The words ‘challenging ‘ and ‘impossible’ have been bandied around with the conflicting demands of £22 billion in NHS efficiency savings by 2020/21 while also working to achieve a 7 day a week service in the same period. While there is certainly no ‘silver bullet’ with finance directors talking of general efficiency savings (without discussing specifics), procurement savings and ‘supporting staff to work in different ways’ (isn’t this falling under the efficiency savings heading?), all external suppliers are going to have to work within this austere context.

Only time will tell how deep and far these cuts will go, however what is clear is that ‘efficiency’ is going to be a key word for all suppliers to the NHS and other public sector health organisations, especially in terms of the service sector suppliers such as research.

In conclusion…

All research suppliers are going to have to think smarter in their research solutions and demonstrate this during the procurement process over the coming months. There are a lot of conflicting demands on limited budgets and research suppliers will need to actively demonstrate that the results of a project will enable efficiency savings as well as insight.

IFF Conference Review: Innovation and insurance

The UK Financial Services Experience Awards

Wednesday 8 July saw the inaugural UK Financial Services Experience Awards ceremony take place in London. Financial Service providers from across the industry battled it out to show the judges how they were seeking to improve experience for their customers.

It was a fantastically hosted event and judging at these awards really showed me how, as a sector often treated with suspicion (and quite rightly in some instances) the Financial Service industry is really looking to put customers’ experience back at the heart of what they do.

This is not an easy task, particularly for insurance providers where trust is low and engagement with providers is often seen to be a ‘necessary evil’.  Having had the opportunity to judge five papers in the insurance category – it was clear to see how technological innovation is really changing the way in which insurance is sold and delivered to consumers. Advances in technology now mean customers can expect to see pop up web-chat when at the point of purchasing online and some providers are even beginning to offer customers the option of streaming video of damage directly to their claims adjusters.

What I found most interesting is that the eventual winner of the category – Direct Line Group in partnership with True & Good – demonstrated that real innovation does not always have to be technological in nature. They deservedly won the insurance award for their fresh approach using simpler language which was more in keeping with their brand. In turn, this improved customer experience and is also likely to lead to better outcomes for customers.

All forms of innovation designed to improve customer experience within the insurance industry (and more widely within the Financial Services sector) should be welcomed. Having witnessed the rate of change first hand, over the next few years I would expect that the ‘benchmark’ of what counts as a good customer experience from an insurance provider to be raised much higher.

For more information on how IFF help clients in the Financial Services space CLICK HERE