Contractors and freelancers deliver economic benefits the value of which are only just being acknowledged by policymakers. And PCG continues to make progress securing recognition for the flexible knowledge-based workforce on which the UK’s economic recovery in part depends, writes John Brazier of PCG in this article for ContractorCalculator. He details the recent work alerting the political establishment to the impact of contracting and highlights the importance of ongoing research that will unequivocally demonstrate the value of freelancing.
The UK’s contracting and freelancing sector is of national and international importance, and therefore deserving of national and international recognition. PCG’s challenge is to secure support from the consumers of contractors and freelancers, as well as to achieve political adoption of our growing flexible workforce, by demonstrating its value at a business and national economic level.
Engagement with the key influencers within client organisations and policymakers at Westminster and in the civil service will enable us to pursue our other primary aim: to secure a fair outcome for contractors from the IR35 Forum. The tax legislation is set to remain in force, but we can hopefully ensure that improvements to its administration will provide certainty for all and exemption for genuine contractors and freelancers.
Progress on securing recognition at party political level
As part of the integrated campaign to drive up awareness of contracting and freelancing within the political establishment, PCG held fringe meetings at each of the leading political party conferences this year, in partnership with the Recruitment and Employment Confederation (REC) and ComRes.
At the Liberal Democrat Party conference, we held a good debate on the value of freelancing. It was chaired by Secretary of the All-Party Parliamentary Group (APPG) on the Freelance Sector Steven Gilbert MP, with Minister for Employment Relations, Ed Davey on the top table.
The UK's contracting and freelancing sector is of national and international importance, and therefore deserving of national and international recognition
John Brazier, PCG
The focus of the PCG fringe event at the Conservative Party conference was on the just-published report on security clearance and the negative impact it has on competition in the freelance sector, with APPG Chairman Brian Binley MP chairing the session.
Good union attendance at the session on ‘Self-Employment and the Left’ at the Labour Party conference ensured a lively debate was had.
But whilst LibDem and Conservative politicians essentially understand the importance of supporting a flourishing flexible workforce, the Labour party is still catching up. In fact, we will have to wait and see if its attitude to self-employment and freelancing has significantly changed from the one it showed in government. There were, however, green shoots of understanding visible due to the presence of Shadow Business Secretary Chuka Umunna at the conference session.
The outcomes of the meetings this year were encouraging and clearly highlighted what further work is required to demonstrate the value of contractors and freelancers to our political leaders. This is a task currently underway with a follow-up report from the APPG meeting in July, due for publication in November.
Europe update: legislation and coordination
Because of its size and diversity, it can be easy to assume that the UK’s flexible workforce exists in isolation within Europe. But this is far from the case, with an estimated 32.6m European workers classified as self-employed, accounting for 15% of total employment in Europe. In particular, there are thriving contracting and freelance sectors in the Netherlands, Belgium and Scandinavia.
PCG’s Brussels based work is intensely active in engaging with organisations throughout Europe, such as the European Small Business Alliance, which draws together small business membership organisations in the European Union (EU). PCG is a founding member of the European Forum for Independent Professionals, registered this year in Paris and representing national organisations for the freelance sector, including interim managers. And we are entering into collaboration with the Lisbon Council, a leading European think tank.
Despite all these organisations interested in the flexible work option throughout Europe, there is little harmonisation and even less recognition by policymakers in Brussels and Strasbourg of the economic value and importance of the flexible workforce. A challenge we have actively embraced.
Constructing a knowledge base through research
We recognise that we must underpin our awareness campaigns targeting client organisations, policymakers and the political establishment at national and European level with market data and research. To meet this demand PCG’s research is currently progressing on a number of fronts.
An update of the seminal work completed by the Small Business Research Centre at Kingston University in 2008 is now underway. When it was first published, Defining and Estimating the Size of the UK Freelance Workforce was one of the first academically rigorous assessments of the extent and composition of the UK’s flexible workforce.
Also, Professor Andrew Burke, founding Director of the Bettany Centre for Entrepreneurial Performance and Economics at the Cranfield School of Management, is building an economic model that will demonstrate the value of the contracting and freelance sectors to the UK economy. He is currently producing case studies with client organisations and Professor Burke’s headline results will be revealed at The Freelance Lecture on National Freelancers Day.
National Freelancers Day 2011
An important focus of this year’s National Freelancers Day (NFD) on 23rd November 2011 will be The Freelance Lecture. It features a guest panel that will lead the evening’s debate, once again chaired by broadcaster and journalist Sue Lawley, on four key questions:
- How should modern businesses harness freelance talent?
- How can the freelance sector engage more effectively?
- What challenges need to be overcome?
- How to position yourself as a business and a freelancer in this changing world?
Each panel member has a unique position on the contracting sector:
- Professor Andrew Burke is an expert in entrepreneurialism and is undertaking research commissioned by PCG into the economic value of contractors and freelancers
- Networks guru Dr Karen Stevenson believes freelancers are the indicators of the future of work
- Sunday Telegraph Business Editor Kamal Ahmed is one of the most powerful media voices in the finance sector, itself one of the largest consumers of contractors.
As the centrepiece of this year’s NFD’s events, The Freelance Lecture will be video and audio streamed live over the web. A further dozen online speakers will contribute to the live event as it evolves.
IR35 Forum: the only ‘process in town’
Despite the recently published data on the poor IR35 tax yield, and the low number of IR35 investigations that was revealed by a Freedom of Information Act request, there is no reason to suggest that IR35 will go away. In fact, the government has confirmed just the opposite. So the best outcome is to minimise the impact of IR35 on contractors, with revised mechanisms that result from the work of the IR35 Forum, to help contractors become even savvier about the legislation.
We will continue to demonstrate the value of the contracting and freelance sector to an audience of multiple stakeholders, across client organisations and in the policymaking arena
John Brazier, PCG
To achieve that end, the reality is that the IR35 Forum is the only ‘process in town’, which is why we are being helpful and specific about process improvements that can be easily introduced. To that end, PCG is working with Ernst & Young on an IR35 process that will hopefully remove much uncertainty and bring contractors to the position where the process will be clear and provide simpler routes to exemption for genuine contractors and freelancers. Those proposals will be brought before the next meeting of the IR35 Forum in November.
PCG: now and into 2012
PCG’s objectives over the next twelve months are to continue to support, and grow, our membership. We will focus on providing existing and new services that can best further the businesses and livelihoods of our members.
An important task is to stay abreast of the legislative scene in Westminster and Brussels, ensuring that contractors and freelancers have a voice when regulations likely to impact on the sector are under consideration and development. And we will continue to demonstrate the value of the contracting and freelance sector to an audience of multiple stakeholders, across client organisations and in the policymaking arena.
At the core of our activities on behalf of our members remains the importance of ensuring that contractors and freelancers remain free to pursue their businesses and livelihoods without undue and unnecessary regulation. PCG will maintain its pressure on HMRC and the Treasury to ensure IR35 is fairly administered, allowing contractors and freelancers to focus on what they do best.