A recent report that has been released by the People Per Hour (PPH) and the Association of Independent Professionals and the Self-Employed (IPSE) has found that Government policy has resulted in a decline of the freelance sector in the UK.
The report found that the self-employed contractor’s confidence this quarter in annual business performance has decreased by nine points, and has now entered into negative territory. The drop in confidence of the self-employed professionals regarding the economy is at record lows at the present.
The dip in confidence level is most likely due to the announcement in Budget 2018 regarding the implementation of IR35 reform rules in the private sector by April 2020.
Another reason for freelancers’ low confidence regarding the economy is the decrease in earnings.
The latest figures show that the wages of freelancers have decreased by £38 in the previous two quarters. Moreover, the demand for temporary workers has also decreased this year, which represents a further decline in freelancers’ earnings. The salary of these professionals has decreased by £400 this quarter as compared to the previous quarter this year.
A Silver Lining in the Cloud
While the freelancers are pessimistic about the overall economy in the next quarter, a lot of them believe that their day rates will increase by about 8 percent in the coming year.
In fact, day rates of technical and associate professional freelancers have increased this quarter, and the trend will likely continue in the next 12 months.
But according to Suneeta Johal, the Head of Research, Education, and Training at IPSE, most freelance professionals have suffered greatly this quarter, and they blame it all on the current Government’s policy. The pessimistic outlook is mainly due to the Government’s plan to implement the controversial IR35 reform rules in the private sector.
Andrew Burke, Chair of CRSE that promotes rights of self-employment workers, said that the self-employed sector has entered into a recession, and most blame it on the Government. The policies have made it difficult for them to find work.
CEO of PeoplePerHour, Xenios Thrasyvoulou, had stated that the Government has to address the uncertainty and lack of confidence that freelancers are feeling going into 2019. The Government needs to take measures to increase their confidence. This is important so that they are able to contribute productively in the growth of the UK economy.