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Published: 24-Mar-26 | By APSCo
Public Sector
Public Policy
Political Monitor | March 24th Edition
The political and economic environment has continued to evolve against a backdrop of uncertainty following the Spring Statement earlier in the month. Attention has also shifted to the Chancellor’s Mais Lecture on 17 March 2026, which sets out a more detailed and forward-looking growth strategy for the UK economy. While the Government has sought to emphasise economic stability, the Lecture signals a stronger focus on long-term structural reform, including regional growth, AI adoption and closer economic alignment with the EU, alongside global developments and domestic political shifts continue to shape the broader outlook for businesses and employers.
International developments remain a significant factor. Ongoing tensions in the Middle East continue to present a potential risk to global energy markets and supply chains. Any disruption to key shipping routes or energy infrastructure could place upward pressure on oil and gas prices, which in turn may affect transport, food and manufacturing costs in the UK. For employers, particularly those already facing cost pressures, this reinforces the wider uncertainty around inflation and the timing of future interest-rate reductions.
Domestically, political attention has remained focused on the changing electoral landscape. The Greens, Reform UK and other smaller parties are increasingly capable of influencing debate and shaping political pressure, even where they do not hold significant parliamentary representation. This shift reinforces the sense that the UK may be moving further away from a traditional two-party political dynamic towards a more competitive multi-party environment.
For the Labour Government, this evolving political landscape presents both opportunity and challenge. While Labour continues to hold a strong parliamentary majority, pressure from smaller parties and shifting voter coalitions may increasingly shape policy priorities and public debate, particularly on issues such as economic growth, public services and climate policy.
Immigration
The Government has maintained its focus on managing legal migration and ensuring compliance within the sponsorship system. The Register of Licensed Sponsors (Workers) continues to be updated by the Home Office. This document lists Worker and Temporary Worker sponsors and includes information on the category of workers organisations are licensed to sponsor, as well as their sponsorship rating.
Employers who sponsor overseas workers should ensure that their licence details remain accurate and that they continue to meet their sponsor compliance duties.
Parliament, Employment Rights Act & Staffing Sector Regulation
Employment Rights Act – Implementation Phase
In the run up to the 6 April 2026 implementation date, the Government has continued to emphasise the rollout of key Employment Rights Act reforms. Recent commentary suggests a clear focus on delivering early measures ahead of the May local elections, including day one rights, expanded statutory sick pay, and strengthened trade union access.
At the same time, business groups have raised concerns about the pace of implementation and the potential cost impact, particularly for sectors reliant on flexible labour.
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Tribunal Deadlines: Extension of Employment Tribunal limits for most cases from three months to six months.
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Day One Rights: Paternity leave, parental leave, and protections against unfair dismissal become effective from day one of employment.
Healthcare, Education, Construction and Hospitality Members
Healthcare (Adult Social Care): The Employment Rights Act 2025 introduces a framework for a Fair Pay Agreement in the adult social care sector, including the creation of an Adult Social Care Negotiating Body to set pay and conditions. Further detail will be set out in regulations, which the Government expects to introduce in October 2026.
Immigration and Sponsorship Scrutiny (March 2026)
Recent immigration rule changes published on 5 March 2026 confirm a shift towards stricter enforcement within the sponsorship system. This includes tighter salary compliance requirements and increased expectations on sponsors to meet their duties. In practice, this is likely to increase scrutiny on employers within the care sector, which remains heavily reliant on overseas workers.
Construction & Hospitality: Both sectors continue to face pressure from rising employment costs, including increases to the National Living Wage and employer National Insurance contributions. Recent reporting suggests businesses are adjusting hiring strategies in response, which may reduce opportunities for lower-skilled or entry-level workers.
Education: Increased focus on ensuring compliance with new trade union access rights and third-party sexual harassment protection policies for on-site/off-site workers.
Recent evidence presented to MPs highlights growing challenges in hiring, particularly for younger or less experienced workers. Rising employment costs are leading some employers to reduce hiring or favour more experienced candidates. This trend is likely to continue impacting workforce supply across education and other sectors reliant on entry-level roles.
In the News: Keep up to date with our new In the News, where we provide links to our latest media coverage.
Parliament and Consultations
Save this link to access the up-to-date list of open consultations on the Make Work Pay reforms. The consultation on reforming the Conduct Regulations and bringing umbrellas into scope of the Regulations is now open. We are told that the long-awaited consultation on zero-hours contracts/guaranteed hours is written and going through various approvals before being issued.
Make Work Pay: improving access to flexible working – GOV.UK
The Government is seeking views on a new process for employers to follow when handling flexible working requests. The deadline to respond is 11:59pm on 30 April 2026.
Make Work Pay: modernising the Agency Work Regulatory Framework – GOV.UK The Government is seeking views on proposals to improve the framework which governs the temporary labour market to better protect workers while minimising business burdens. The deadline to respond is 11:59pm on 1 May 2026.
Threshold for triggering collective redundancy obligations – GOV.UK
The Government has launched a consultation on the new organisation-wide threshold for triggering collective redundancy obligation under the Employment Rights Act 2025, seeking views on how this should be implemented. The deadline to respond is 11:59pm on 21 May 2026.
Growing up in the online world: a national consultation - GOV.UK
This is the much-publicised consultation on restricting social media and addictive design features. The deadline to respond is 11:59pm on 26 May 2026.
Other Announcements & Publications
Economic Growth
Recent announcements from the Chancellor Rachel Reeves highlight a continued focus on economic growth, including increased investment in AI and emerging technologies. In her Mais Lecture on 17 March 2026, the Chancellor set out a more detailed growth strategy built around three core pillars: regional growth, AI adoption, and a closer economic relationship with the EU.
A key structural announcement was the development of a fiscal devolution roadmap, expected at the Autumn Budget, which would give regional leaders greater control over a share of national taxes (including income tax). This signals a shift towards more locally driven economic growth and investment.
On AI and innovation, the Government committed £2.5 billion to support adoption and development, alongside plans to upskill up to 10 million workers and introduce new initiatives to support employers in creating and filling tech-focused roles. This reinforces the direction of travel towards a more technology-driven labour market.
The Chancellor also indicated a willingness to pursue closer alignment with EU regulation where it supports growth and stability, acknowledging the economic impact of Brexit and the importance of reducing barriers to trade. However, uncertainty remains as negotiations continue and key political constraints remain in place.
However, rising energy prices and global instability continue to present risks to inflation and business costs.
For APSCo members, these developments point towards a labour market increasingly shaped by skills investment, regionalisation, and technological change, alongside continued uncertainty in international trade and cost pressures.
DWP Announcement: Growth and Skills Levy Reforms
On 16 March 2026, the Department for Work and Pensions announced reforms to the Growth and Skills Levy aimed at tackling youth unemployment. The package includes £1 billion in funding to support up to 200,000 jobs and apprenticeships, with a clear shift towards prioritising younger workers and entry-level roles. New employer incentives have been introduced, alongside more flexible training options and reduced funding for apprenticeship standards focused on existing employees. The reforms signal a move towards increasing entry-level hiring and reshaping how levy funding is used.
Immigration Rules Changes
On 5 March 2026, the Government published a wide-ranging Statement of Changes to the Immigration Rules. Key updates include stricter sponsor compliance requirements, changes to Skilled Worker salary rules, and the introduction of new restrictions within certain visa routes.
These changes form part of a broader tightening of the UK’s immigration system, with further reforms expected over the coming year.
Wider Migration Policy Developments
Alongside rule changes, the Government has continued to signal a tougher approach to migration policy. This includes measures to reduce support for certain asylum seekers and increase enforcement activity.
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