Just in time for Valentines. The news this week was meant to just be the good news about freelancing, but sadly we don’t control the headlines. Instead, please find a delicate arrangement of some great things that happened over the past week, and some not so great news that also came out.
Will the UK be a Freelance economy after Brexit?
New research from Worksome shows that over 62% of businesses plan to hire part-time staff rather than full-time staff. Currently, 87% of businesses shun freelance work as an option, despite nearly half of them admitting that they believe freelance work to be more productive than other options of employment.
Company culture will be instrumental in how well a business can weather the Brexit storm. To build and maintain a core loyal workforce amidst uncertain times, and sustain the long health of a business, the logical approach for employers is to hire a blend of full-time employees and freelancers.
If freelancers’ contribution to turnover is proportionate to their presence in the wider group of businesses without employees, their collective sales would be approximately £125 billion. That equates to 46% of the £271bn contributed by the UK’s wider solo self-employed workforce.
Freelancers will have a clear market once the Brexit chips fall where they may. Businesses that continue to thrive will be in need of flexible work, and thus options to contribute will continue to make themselves clear.
HMRC’s Check Employment Status for Tax (CEST) is still not properly tested two years since its release, according to a Freedom of Information (FOI) request by UK contracting industry organisation
Frustration, thy name is HMRC. Despite claims to attempt to help freelancers, HMRC has failed to adapt their CEST tool despite findings of its inaccuracy two years ago. It found over 95% of freelancers to be self-employed, despite those same workers being deemed as self-employed by HMRC a year earlier.
Dave Chaplin, chief executive officer and founder of Contractor Calculator said: “HMRC imposed CEST upon the public sector and by doing so has cheated many honest taxpayers out of thousands of pounds in the process with a tool that is not fit for purpose and does not work.”
HMRC has pledged to work with stakeholders to improve CEST but the reality is that it has not been working on the tool and has continued to issue tax bills off the back of faulty results.
Affordable Artist Workspaces being launched in London
Arts Professional reported that the Mayor of London, Sadiq Khan, has started a new independent trust that will provide affordable workspaces for artists in the city.
Backed by funding of £4m from City Hall and £2m from Arts Council England (ACE), The Creative Land Trust is also looking to receive finance from property developers and London councils, and hopes to secure 1,000 affordable workspaces within five years.
The Mayor says he felt that not enough room was being made for London’s culture scene, describing the lack of affordable workspaces as a “crisis”, and announced his fear that creatives are “at risk of being priced out of the communities they call home”.
In order for London creatives, and their businesses, to grow, and continue to contribute £47bn to the economy and “maintain our place as a leader”, Nicholas Serota, Chair of ACE, says “we have to keep creatives right at the heart of the city, and we have to ensure that they have adequate space in which to work”.
With an aim to protect and maintain affordable workspaces, the Mayor’s office described the trust as being “an independent organisation that will provide financing for affordable workspace providers to buy buildings and will purchase its own property to be used as permanent workspaces for artists in London”.
One in seven zero-hour workers (16%) do not get given work each week
Desperate Workers who earn around £4.10 less an hour than their colleagues, are working the most difficult shifts in order to survive.
The TUC General Secretary Frances O’Grady, said: “Zero-hours workers regularly work through the night for low pay, putting their health at risk. And many face the constant uncertainty of not knowing when their next shift will come.”
These findings come just months after the Government announced that it would introduce new rights for millions of the UK’s zero-hour-contract workers.
But the TUC are calling for a ban on zero-hour contracts altogether. Instead, they want to introduce reasonable notice periods for shifts, and have workers entitled to receive pay for cancelled shifts.
However, the Government rejected this idea, saying that stopping zero hour contracts would do more harm than good.
Self-employed mortgage completions rise by 87% from last year
Specialist Lender Pepper Money reported that the number of self-employed mortgage completions has risen by a staggering 87%, from 2017 to 2018.
This is due to a number of enhancements introduced in 2018, such as additional allowable income considerations like the use of home as an office and private health insurance.
This trend is still on the up, as Pepper Money reported 64% more self-employed DIPs and 26% more self-employed completions in January 2019 compared to last January.
Paul Adams, the sales director at Pepper Money, said: “With so much diversity in the way that business owners draw their income, a cookie-cutter approach to self-employed borrowers is rarely going to fully account for their true earnings.
“This is why we worked hard at Pepper Money to improve our criteria for self-employed applicants and to support this criteria with our team of specialist underwriters.”
Diageo sponsors the #CreativeComeback scheme supporting female creatives returning to work
Diageo is the exclusive sponsor for the Creative Equals ‘Returners’ scheme – #CreativeComeback – which supports female creatives in the UK who are returning to work after taking at least a 12 month career break.
Syl Saller, the CMO of Diageo, shows why he wanted to get involved with the scheme, saying: “when just 12% of creative directors are women it’s not enough to talk about our ambitions for change, we need concerted action to turn the dial.”
The scheme is supported by the UK Government Equalities Office, and will oversee 50 female creatives, including art directors, producers and designers, who will take part in a two-week programme to help them transition back into work-life.
“#CreativeComeback is how we create real tangible action to change the ratio of women in creative,” says the Founder of Creative Equals, Ali Hanan. “With training from D&AD, Facebook and many top coaches, we know this programme will help put bridges back to work for those who have left due to children, cancer, caring responsibilities or other reasons.”
Trade Unionists tackle the modern economy at a Tech Conference
A technology conference is being held in Glasgow where academics and trade unionists will discuss issues to do with the gig economy and gender biases in AI.
The impact of technological change for women workers is one of the things that the Scottish Trade Union Congress (STUC), will be addressing, says Roz Foyer, their chairwoman:
“Already, there are fewer women qualified to take STEM jobs and there is a risk that artificial intelligence hard-wires sexism into the hidden algorithms that are used for appointing staff and allocating roles.
“Just as equality reps are there to make sure workplaces are free from discrimination, union branches need to understand the biases and assumptions which are hidden within data-driven performance targets and digital management systems.
“That’s why it makes sense to build up the tactics to ensure that new technologies do not leave workers voiceless and insecure.”
13% of foreign workers say they will leave the UK if there is a no-deal Brexit
Tidy Choice, surveyed over 3,000 London-based, independent professionals from its database, to find out how foreign workers feel about Brexit. They found that a no-deal Brexit could result in 54% of Eastern European workers and 47% of foreign workers leaving the UK. Individuals who have lived in the UK for five years or more are 58% likely to stay. But people who have lived here for two years or less are 67% likely to to leave.
Does economic data still apply?
Paul Donovan, the global chief economist of UBS (UBS) wealth management, told journalists last week that both official and unofficial economic data — ranging from unemployment numbers to surveys of business sentiment — were becoming less and less reliable as gauges of the underlying economy.
If correct, Donovan’s analysis means stock market movements may be being driven by faulty information. It also means that investment funds, which people depend on for their pensions and for income, are at risk of being driven by feelings rather than fundamentals.
Donovan’s argument rests on two ideas. Firstly, that changes in the way the economy works means traditional data measurements are no longer fit for purpose. Secondly, that survey data is becoming increasingly unreliable.
“The unemployment number does what it says it intends to do,” Donovan said. “But what we’ve got to recognise now is we’re not in the economy of the 1950s where you clock on at 9 and you clock off at 5. That’s just not the way the world is working anywhere anymore.
“In many ways you’re going back to 18th century economics where people hold multiple jobs, they’re self-employed in a variety of ways and they do lots of different things. Some of the jobs they’re paid for, some of them are voluntary — it becomes a lot more complicated.”
“You look at the headline number and think: ‘poor capital spending, this is terrible,’ and you don’t think ‘actually increased efficiency in the economy, this is great,’” Donovan said. “These confusions are coming in.”
Donovan recommended investors focus on five-year correlations with data, which he said would likely give number-crunchers enough time to properly revise the data until it’s relatively accurate.
He said that despite the current “noise” about the possibility of recession this year, the global economy “is doing just fine.”
Freelance creative workers appear worse off than those in employment
Arts Professional found that out of 224 respondents with a solely freelance or self-employed income from the cultural sector in 2017/18 earned an average (median) of £16,000.
“We really need to understand and track how much work is done for free,” one respondent said. “80% of my creative work is now unpaid. 10 years ago 80% was paid.”
A recurring theme is that the number of hours set out in a contract is grossly underestimated.
A costume supervisor said working overtime without pay is seen as not being an option in her field: “Costume supervisors fear being blacklisted if they are perceived as being ‘difficult’ and so many will struggle through on less than the minimum wage to get the job done.”
An art facilitator explained that what appears to be a good pay at first, turns out to not even cover the bare minimum for expenditures. They explain that the £35 per hour being offered to them:
“is meant to include your mileage, your travel time, your research and designing of workshop, your sourcing and purchasing of materials from various shops, your prep of materials, the set-up, the take-down and clean-up of equipment after. It works out way less than minimum wage when you factor in the time it takes to do all this. Factoring all the above you’re actually out of pocket by the time you travel to work a one-hour job.”
Not to mention when you go through all that trouble and find that all your hard work has been for nothing, and you won’t get paid: “Quite often projects are cancelled or postponed and there are no cancellation fees in contracts, even though you’ve set aside time and not taken on other work for those days. It wouldn’t be tolerated in any other industry.”