PCG calls for fresh approach to freelancing

As we flip the calendar onto a new decade we inevitably start to reflect on the past, set goals for the future and ponder on what fate has in store for us.  Sadly, the one thing clearly evident is that we face a very uncertain future.  Despite signs that the economy is picking up with the stock market, retail and manufacturing all indicating positively (we may even officially be out of the recession) it is clear that unemployment and inflation will continue to rise and this will have repercussions on how we emerge, whether we see a double dip and ultimately how strongly we will develop as an economy. 
 
Uncertainty abounds in our political future too, will Gordon Brown survive today’s challenge to his leadership?  Regardless of the outcome of this challenge, all signs point to a government change in the spring and indeed, even if Labour return to power we are looking at a much changed political environment.  Whatever the flavour of future government they will need to be observant, fleeter of foot, more creative and prepared to effect real and often fundamental change. 
 
In this environment PCG is renewing its call for a fresh approach to freelancing, emphasising the vital role freelancing has to play in assisting growth.  Government and policy framers have failed to recognise the value of the UK’s 1.4 million freelancers despite overwhelming evidence that freelance businesses are the bedrock of the economy, bringing essential flexibility and skills. 
 
In Quarter 4 2009 PCG launched its Fairness, Clarity, Recognition: Manifesto for Freelancing.  Copies have been sent to all MPs and Prospective Parliamentary Candidates as well as stakeholders.  We will be emphasising these points hard in the run up to the election.
 
PCG is leading the way by calling for a fairer tax and regulatory regime.  We need a pro-business climate fostered in the UK, a real commitment from policy framers to think small first, not just say it.  Fair regulation means regulation that is clear, accessible and not unduly burdensome. 
 
Fairness means allowing freelancers easier access to the market for their services.  The Government needs to ensure regulatory barriers, burdens and costs to tendering are reduced, so freelancers can truly compete with larger businesses.
 
Heavy handed and senseless laws weigh business down like a ball and chain.  This is even more so with nano-businesses.  Every hour spent complying with red tape is an hour not spent productively.  We need to free up Britain’s talents to create wealth, not stifle them with top down bureaucracy.
 
Elsewhere, PCG is asking that in future all Government departments will have to ensure that 10% of their procurement budgets will go to nano-businesses and that Government departments and their contractors must not discriminate against freelancers who do not have pre-existing security clearance when it chooses which freelancers to award a contract to.
 
Looking at short term opportunity and long term competitiveness issues, Intra Company Transfers (ICTs) to flaunt immigration laws could have a very profound long-term effect as well as limiting the current opportunities for our freelance contractors and consultants.  Government must be vigilant to such problems and prepared to stand up to large companies who are breaking the rules.
 
It is PCG’s fundamental belief and echoed by most leading business commentators that flexibility in the labour market is the key to ensuring Britain’s future economic success.  The next Government must encourage freelancing as a flexible, innovative and entrepreneurial way of working that enables business to perform more cost-effectively, especially when recovering from recession.
 
The start of a new decade provides an opportunity for fresh, innovative thinking.  We will be continuing to push this message up to the election and beyond.

For more information on PCG activities, visit www.pcg.org.uk

Pain delay!

As the economists and analysts retire to do the number-crunching on today’s Pre-Budget Report (PBR), including those from PCG itself, we are left contemplating the full extent of the Chancellor’s plans. As the report provides no incentives for SMEs to employ more permanent staff, the advantages of engaging freelancers become clear as the viable option to help SMEs in the recovery.  By engaging freelancers, companies minimise the risks and the costs typically associated with recruiting employees, and are able to tap into a pool of specialist skills on demand, allowing them to grow their business.

With unemployment likely to rise, freelancing certainly represents an excellent way to re-enter the labour market more quickly, as it allows flexibility for both worker and client. This echoes the Government’s repeated sentiment that those out of work must return to the labour market as soon as possible. For highly skilled professionals, especially the experienced ones, the option of self-employment surely provides a quick response.  

On a side note, I wrote a letter to Peter Mandelson in November 2008 asking for the 10 day prompt payment initiative to be extended down the contractual chain. When it was first introduced, agencies and prime contractors were not paying the freelancers they were subcontracting promptly. I note today that in the PBR the Government reiterates its commitment to ensuring 90% of its invoices are paid within 10 days, especially to small business. This was welcome to read, buried as it was in the full report, as Lord Mandelson never got around to writing back to me.

It looks like the calm before the storm. We were expecting a much harsher statement, although this has hardly had a warm reaction from the business community. My advice is: batten down the hatches, keep your guard up and maybe have a strong drink!  

Look out May 7th!?

The flexible periphery

The CBI has published this week a major report, with the title: the shape of business – the next 10 years. 500 CBI members, including PCG, participated in workshops across the UK in September to share plans and ideas about the future of UK businesses. This horizon-scanning exercise, which culminated with the report, is giving us an excellent insight into how businesses are likely to adapt and evolve in the aftermath of the credit crunch and the recession. The CBI will use the findings to improve their understanding of how Government policy will need to adapt to changes in businesses.

The debate about how UK businesses can best position themselves for the challenges ahead is finally taking shape. When it comes to the future of the workforce, the report states that “a significant number of businesses will move to a new employment model where the core of permanent staff is smaller and a greater number of freelancers, consultants and temporary workers are used”. We cannot agree more. It is very encouraging to learn that the CBI is recognising the vital role that freelancers play in making businesses more competitive.

Labour flexibility was always seen in terms of employment, i.e. how employers could bend the 9-to-5 traditional arrangement applied to permanent staff. Concepts such as working from home, teleworking, mobile working were often cited as the only way businesses could implement flexibility. This is the first time that the CBI has explicitly acknowledged the value of freelancers in its own publications. Businesses have finally realised that, in time of recovery from recession, engaging freelancers represents a sound way forward. We have been saying that for the past 10 years and have also highlighted it in our Manifesto, launched this week. UK businesses have now a great chance to lead the way in Europe as champions of labour market flexibility and true innovators. Greater flexibility will require new products and new relationships, and the next Government will have to ensure the UK has the best environment to ease this process.

IR35 is clearly not a good and palatable tax

It is good to see that IR35 is getting exposure through the mainstream press again.  IR35 really exemplifies what is wrong with the taxation system in this country – as Anne Redstone (professor of Tax Law at King’s College London) points out in her recent statement on Newsnight.

 “… there are burdensome, bureaucratic taxes which raise almost no income. The IR35 legislation, aimed at temporary workers, brings in merely 1% of its predicted £800m a year, but is hugely expensive to administer.”

 We have recently been discussing this subject with Anne and certainly echo this sentiment.  It is good to hear that leading experts are concurring with the long held views of PCG and that in tandem with the work we are doing to underpin the value of freelancing to the economy the pressure on IR35 continues. 

 On National Freelancers Day a selection of leading experts are putting forward their views on the vital contribution that freelancing makes to the world of business in a special webcast. 

 See the full commentary from Anne Redstone here:   http://news.bbc.co.uk/1/hi/programmes/newsnight/8352611.stm

More detail on National Freelancers Day here www.nationalfreelancersday.org.uk

National Freelancers Day: website launched

We are delighted to announce that the National Freelancers Day website is now live.  National Freelancers Day has been set up to raise the profile of the freelance sector, project the value that freelancing delivers to UK business and champion the unsung heroes of the UK economy, freelance contractors and consultants.

Exploring the increasing significance of Freelancing

Through a range of online and local events National Freelancers Day will focus very much on how freelancing fits into an evolving business environment. Key speakers will be drawn from the world of business to explore how the workplace is changing and where freelancing fits in this changing landscape. In addition to this exciting program of events, PCG is conducting, compiling and consolidating research on the size, scope and opportunity for the UK Freelance workforce, emphasising the value that this skilled workforce delivers to UK Business and highlighting the way freelancing is evolving into an increasingly significant part of the UK economy.

Delivering a Manifesto for Freelancing

On National Freelancers Day, PCG will be delivering a “Manifesto for Freelancing” to all candidates for the General Election. This concise and considered document will present to the government of tomorrow a freelance prospective of the key challenges and opportunities as they impact upon our community. The manifesto will be delivered by post and presented at receptions in Westminster and Holyrood.

Creating A better environment for Freelancing

In the run up to National Day, PCG is encouraging freelancers, suppliers and information hubs to explore the positive aspects of freelancing and highlight the strong community that exists in supports of the freelance workforce. A range of tools will also be provided through this site to help businesses and individuals explore the freelance model and how it could work most effectively for them.

Find out how to get involved on National Freelancers Day.

Disappointment at the findings of the Migration Advisory Committee’s (MAC)

We were to be frank disappointed at the findings of the Migration Advisory Committee’s (MAC) Report on the abuse of the Work Permit system.  This is a serious issue for the freelance community, with livelihoods challenged by what can only be described as blatant abuse of the system by large companies.  “Intra Company Transfer” (ICT) abuse leads to the displacement of skilled resident workers, such as IT contractors and Engineers and the unlevel playing field created, if not dealt with swiftly and effectively, will have far reaching effects on the freelance marketplace and more broadly long term UK competitiveness.

Instead of tackling the issue head on and tightening the rules to limit the use of ICT permits in the recession, the MAC simply called for stronger enforcement of the current rules.   In their report MAC did, however, underpin our concern at abuses and recommended that more resources are deployed enforcing the current rules – something PCG originally called for as part of its submission to the body.  The MAC also suggested changes to the way ICT migrants are paid, and recommended that ICT migrants should have worked for their company for 12 months prior to working in the UK rather than six as now. 

More encouragingly the Government is set to go one step further than this and now forbids the use of ICT permits where they will be directly replacing a settled UK worker, exactly what the PCG has been asking for.  This new measure seems to send a clear signal to those abusing the system: replacing highly skilled contractors with ICT workers will no longer be tolerated.  However, the new rules are still too vague and we will now need clarification from the Government on their exact implications.  It must be totally clear that firms cannot work round the system and seek loopholes.

Let’s hear it for the MAC

The Migration Advisory Committee (MAC), the body which advises Government on its immigration policy, has just begun sifting through the no doubt hundreds of responses it will have received to its “Call for Evidence”. This exercise asked whether and how the immigration system should be tightened, and what economic evidence exists for such a move.

Clearly, this is an important issue that concerns many IT contractors, who rightly feel angered by revelations such as those made in a recent edition of “File on 4” on Radio 4, a program to which we contributed many facts and figures. Reports from our members allege that BT may be massively exploiting a loophole in the immigration system – the “Intra Company Transfer Visa”  (ICT). According to these reports, this allows BT to replace hundreds of contractors with “onshored” IT staff at lower cost. Rules within the ICT system are meant to prevent such visas from being used to displace UK workers, yet, unfortunately, this is not what seems to be happening. This is against the spirit of these rules and is undermining the UK contractor market in a recession.

Amongst this strength of feeling, the MAC’s call for evidence provides a golden opportunity for change to the system, something we have been calling for over many years. Our membership of the Migration Advisory Committee’s stakeholder forum has allowed us to have a say in the operation of the immigration system, and has no doubt played a very big part in instigating this review. Our past efforts have been successful- we have managed to remove IT skills from the list of shortage occupations, for example, but more needs to be done.

Numerous organisations have submitted responses to the MAC, including APSCo, who recently released a press release on the subject stating they have done so. It is pleasing to see such organisations adopting PCG’s stance – that is to say, supporting the reform and tightening of the Intra Company Transfer system, and this to me demonstrates just how big a problem this is. We’ve worked very hard to get to this stage and now all that remains is to continue to engage with the Migration Advisory Committee and with other key stakeholders.

We have been meeting with the MAC regularly to present our ideas and evidence and we welcome submissions to our evidence gathering campaign to strengthen our case. We have also met with key industry bodies like e-skills, the sector skills panel for the IT industry, in addition to academics and economists – so we have a very long history of activism in this area.

We’re calling for a system that will be better enforced and that will ensure a post is only filled by a migrant worker if no suitable domestic worker can be found. We’re also calling for more transparency in the way ICT workers are paid. Above all, we’re calling for a fair system, and for UK contractors to be given the opportunities they deserve to provide their skills to UK PLC. Our efforts seem to be bearing fruit with the MAC’s latest review, and I await with interest their findings in July.

A mere ripple in a duck pond

Two weeks in anyone’s life is not long, but for MPs it must seem like an eternity.  Recent events have even got me wondering whether I have ever claimed anything I shouldn’t…you know, the odd bag of crisps and newspaper buried in a business petrol receipt, or that claim for the Hot Air Balloon flight so as to do some ‘blue sky thinking’  [sorry Gov!…genuine mistake.]   Also reminds me of the chap who claimed for a dinner suit and was caught with his trousers down over it.   He then told his boss he would resubmit his expenses next week and upon submission, challenged him to find where he had hidden the suit claim.

Being ‘found out’ is what we at PCG would like HMRC to own up to, following our FOI Act request in seeking the figure of actual revenue attained by the Government since the introduction of IR35, an ‘extremely modest’ £9m over five years, This puts the £220 million expected revenue from NICs alone in some kind of perspective.  So all that continuing grief and uncertainty for ‘tax law abiding’ freelancers takes on some real meaning now.  I am really looking forward to standing next to the minister concerned [in true Joanna Lumley style] and announcing that we have now won agreement to IR35’s abolition, but I need a ‘cry’ al la Gurkhas…any thoughts?   Maybe ‘aye aye…games up’!!?

PCG has just appointed Jim Cassidy, of Prima Media and Communications as its press relations advisor north of the border.  Jim has seen his fair share of ‘anger’ stories I’m sure, being former editor on the Sunday Mirror and the the Sunday Mail, not to mention his stint on the press complaints commission.  He will be a great asset to PCG as we ratchet up our activities in Scotland in the coming year.

Oh! and don’t forget, we are celebrating National Freelancers Day on November 23rd and the many and valuable services that the freelance community contribute for the country’s well being. There will be an event or meeting near you somewhere on the day, so don’t forget to claim your travel expenses to get there…that surely must be allowable and in the interests of GB plc, unlike ‘duck ponds or islands’

Have a great bank holiday weekend.

New Board for PCG

We are delighted to announce two new members of our Board who were elected from our Consultative Council on Saturday.  The Board of Directors is now made up of 2 appointed Directors and 6 PCG members (full details on www.pcg.org.uk) who work with the staff to support the ever growing membership.  The PCG is developing rapidly as an organisation and our two new board members bring a wealth of experience in terms of project management skills and, particularly in the case of Geoff Jones, dealing effectively with HMRC. 
 
Without doubt, the next 12 months are of fundamental importance to the Freelance community and the PCG remains focussed on how to make the most of the changing economic and political landscape.  These are unprecedented times and clearly we have to be watchful of all opportunities to influence the debate in favour of the freelance sector.

Starting up as a Freelancer?

This week’s unemployment figures show another 244,000 finding themselves without regular work.  In this environment, more and more people will start considering “the third way”.  If you are thinking of joining the 1.4 million freelancers in the UK it is not an easy option, but can lead to a fulfilling and exciting career.

If you are interested in setting up as a freelancer, the first thing to consider is what you’re selling – look at your experience and CV and draw out your core competencies and sellable skills (define your product).  Cross reference these with relevant job boards and websites.  Is there a market for you? 

If you feel that there is a market, now is the time to consider carefully the benefits of being freelance such as:

• being your own boss
• having the freedom and striking the work/life balance (consider carefully the reality as opposed to the ideal)
• variety – working on a range of projects
• working for multiple clients, potentially not having all of your eggs in one employment basket

Consider also the disadvantages of freelancing:

• less security (sick pay and holiday pay will be a thing of the past!)
• uncertainty
• potential isolation
• the responsibility and time associated with running your own business
• 100% accountability 

again social networking websites can often give you some fascinating insight into the daily worries, problems and experiences of people currently at the coal face (they should also give you a clue about how easy work is to come by and the competitive environment that you will be entering). 

The practicalities also clearly need consideration – look at your earnings potential as a freelancer.  There are some great calculators around to help you with this (be realistic!).   

If you are still keen to press ahead, you will need to work out the best route to market for you.  Freelancers can find work directly and/or sign up with a recruitment agency that specialises in their area of expertise.  Either way you will need to brush up on your sales skills and consider how best to promote your business.  Actively network to your old contacts, it is time to get that address book out and start looking on Linkedin and Facebook for old colleagues.  Remember what’s in it for clients (why you might be useful to them as a freelancer):

• Freelancers offer a more flexible resource than permanent staff, they can call upon freelancers as and when they need the resource which has to be an advantage in this economic climate
• Freelancers are not a burden on resources – companies don’t have to pay them sick pay, holiday pay, redundancy pay or pay their NICs
• Freelancers are well placed to take on projects that can yield quick wins (and may be on the back burner because of resource issues)
• Freelancers are well place to drive and manage change
• Freelancers can provide expert skills that an in-house team may not have
• Freelancers usually bring a broad range of experience, seldom available in-house

Once you know what you are selling, who you are selling to and have a feel for the market, seek out good professional advice from experts – accountants, personal finance advisors – experts who understand the contracting and freelance marketplace and model and can help you establish and manage the business model best suits you (e.g. sole trader, limited company, umbrella etc…).

 The PCG’s Guide to Freelancing provides a useful source of information to new and established freelancers and small business owners, and offers a wealth of helpful advice about running and nurturing a successful business.  Further information is available through www.pcg.org.uk and we work with a range of companies who can help you.