Self-employed Londoners, many of whom have struggled during the pandemic, deserve a better deal, according to a new report by think tank Centre for London.
Centre for London’s report, co-funded by the Mayor of London and Community Union, calls on the UK and London government, and employers, to improve conditions for London’s low-paid self-employed workers as the UK emerges from the COVID-19 crisis. It follows the Chancellor’s announcement last week to extend and expand the Self-Employment Income Support Scheme (SEISS).
Self-employed workers have been much more exposed to the economic shock of the pandemic. Even before the crisis an estimated 55 per cent of those in London were low paid. And Centre for London’s recent Snapshot of Londoners survey found that the pandemic has pushed more self-employed people into financial hardship: 55 per cent of self-employed Londoners said their income has taken a hit, compared to 44 per cent of employees.
Self-employment offers flexibility and autonomy, but workers can experience bad client behaviour such as late payments and last-minute cancellations. They also struggle to pay for expensive workspaces and professional development opportunities.
The Centre’s findings suggest that many self-employed workers have a high level of job satisfaction and want to remain self-employed. However, the financial difficulties many have faced during the pandemic may change this: in September 2020, 64 per cent of self-employed workers reported they were “less likely” or “unsure” they wanted to be self-employed in the future.
The Centre argues that supporting low-paid self-employed workers to grow their earnings and enjoy their working life should be a priority for recovery.
The report makes a number of recommendations, including proposals for a Client Charter of good practice for London’s businesses to improve their relationship with the self-employed workers they hire.
The Client Charter would encourage employers to:
Ensure self-employed workers are paid fair fees and receive payment on time;
Commit to anti-bullying and harassment policies, as well as complaints procedures;
Uphold health and safety standards for self-employed workers;
Offer mental health support schemes to self-employed workers, when offered to employees;
Review procurement processes to ensure self-employed workers are not at a disadvantage.
The Centre suggests that the UK government could support this voluntary city-wide initiative by establishing and funding a single body to improve the enforcement of labour market rights for self-employed workers.
The Centre recommends that the Clients Charter should be implemented alongside a suite of other measures, including grants for self-employed workers to access existing mentorship portals, and online support and training courses to assist with professional development. It also highlights that more needs to be done to help self-employed workers find affordable workspace, and suggests that local authorities continue to secure long-term spaces through planning policies, as well as publicise empty commercial spaces in their area.
Sadiq Khan, Mayor of London, said:
“Self-employed workers make a crucial contribution to our city’s economy, but for far too long they have not been afforded the rights and support they deserve. This has been compounded by the impact of the pandemic – and the Government has failed to provide sufficient levels of support to replace their lost income.
“I welcome the Centre for London’s call for authorities and businesses to work together to protect self-employed Londoners, and as Mayor, will continue to do everything I can to stand up for them.”
Erica Belcher, Senior Researcher at Centre for London, said:
“The COVID-19 crisis has been devastating for the finances of many self-employed workers which could take them years to build back up.
“Self-employed workers need fundamental improvements in working conditions to be able to easily and confidently call out bad working practices and receive compensation.
“As London’s economy reopens, employers will find they can’t meet demand without London’s army of self-employed workers. Addressing the issues that have been holding them back long before the crisis will be more important than ever as London recovers.”
Kate Dearden, Head of Research, Policy and External Relations at Community said:
“Over the last year the self-employed have often been the forgotten millions of the pandemic when it comes to government support, leaving many of them left behind and facing significant financial hardship.
“16.9% of workers in London are self-employed. This is the highest in the U.K. and represents over 800,000 people. The self-employed sector is pivotal to the UK’s fastest growing and innovative industries such as in science, engineering, healthcare, the arts, entertainment, the media, and in the delivery of other important services across the country. They must be supported through this pandemic and beyond.
“We hope to see the creation of a Client Charter for the self-employed, and see this as the first step to creating a more stable foundation for London’s self-employed workforce in the future and ensuring that the many voices of currently struggling self-employed workers are heard.”
Andy Chamberlain, Director of Policy at IPSE (the Association of Independent Professionals and the Self-Employed), said:
“A disproportionate number of UK freelancers live and work in London. Therefore, it is both unsurprising and deeply concerning that the financial impact of the pandemic has hit London’s self-employed hard.
“The dynamism and innovation of the self-employed sector will be vital for London’s economic recovery. However, the stark gaps in government support for the self-employed may undermine their ability to do this – and this research raises the worrying prospect of a long-term downturn in self-employed numbers in the capital.
“There are, however many positive recommendations in this report to help the government and the Mayor of London reverse these concerning trends – particularly a Client Charter to give better and more secure opportunities to the capital’s self-employed.”
The Snapshot of Londoners is a quarterly survey of Londoners, conducted in partnership with Savanta, looking at how Londoners’ perceptions and behaviours change over time. The most recent issue is available here.
The Inquiry into the future of self-employment is a survey of self-employed workers, commissioned by Prospect, Community and the FSB, looking at how the COVID-19 pandemic has impacted them. The full report is available here.