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In FCSA’s September 2020 edition of Workforce Barometer, we continue to seek to provide data and insights to support recruitment agencies and end-hirers with issues relating to the current coronavirus pandemic.
From survey data released by the ONS, we have also identified that, as at 10-23 August 2020, more than one in ten organisations in the UK have flagged that they are either at high (1.4%) or moderate risk (9.3%) of insolvency. This is supported by evidence that, for 16%, operating costs were greater than turnover and that 9% have fallen behind on invoice payments.
Set in the context that 24% of UK enterprises have accessed some form of a government-backed loan or financing – which, by the end of July included £10.5bn accessed via CBILS/CLBILS and an incredible £31.7bn accessed via Bounce Back Loans – the government may well be concerned that significant proportions of these monies may never be recouped. It is also worth noting the extent to which access to government-backed funds dwarfs the aggregate value of grants distributed via Local Authorities, which totalled £11.0bn.
What such staggering numbers also help to contextualise is the level of disruption that the government had, pre-COVID, been prepared to go to generate what now feels like relatively small amounts of funding. With 2021 reforms seeking to target (an unsubstantiated) £1.3bn of additional annual tax-take from the private sector off-payroll reforms – impacting all medium and large employers who use freelancers and, potentially, up to 600,000 PSCs – and with solutions such as SEISS and CJRS developed so seemingly quickly and effectively when the crisis struck, it now feels like there should have been a far less disruptive way of addressing governmental concerns than the solution currently being implemented.
With HMRC currently out in the market holding roundtable discussions about how to ‘control’ the umbrella market, we must lobby to achieve a simple and effective control mechanism rather than just a new rule book that puts the legal onus on those least qualified to understand it.