Self-employment has become a common feature of London’s labour market:
- 18 per cent of workers in London were self-employed in 2019, the highest
proportion of all UK city regions. This compares to 15 per cent across the UK.
- In some sectors, over one-third of the workforce was self-employed: 52 per cent of household workers, 42 per cent of the construction workforce and 36 per cent of the arts and entertainment sector were self-employed.
Although self-employment is sometimes seen as a lucrative way to earn a living, earnings are low for many:
- An estimated 55 per cent of self-employed workers in London are low paid, compared to 49 per cent across the UK. 1
- Women, and people from Black and minority ethnic backgrounds, are more likely to be in low pay when self-employed.
On top of this, self-employed people have been particularly affected by the COVID-19 crisis:
- 55 per cent of self-employed Londoners said that COVID-19 had negatively affected their income, compared to 44 per cent of employees.
- 38 per cent of London’s self-employed workers said they are struggling to make ends meet, compared to 28 per cent of employees.
Despite the challenges of the pandemic, our findings suggest that most want to remain self-employed – but many would like to see improved working conditions:
- Poor client practices: Self-employed workers tend to experience poorer treatment than employed Londoners – late payments and last-minute cancellations are rife.
- Enforcement of rights: Where protections do exist, they lack enforcement. Self-employed workers are responsible for challenging poor treatment themselves, but few can afford to do so.
- Support, development, and training: Self-employed workers have responsibility for their own professional development, but many miss out, as courses are costly and time off work is difficult to take. 2 This is a particular concern in sectors where minimum industry standards are specified and regularly updated – but also more generally for workforce productivity and long-term resilience.
- Finding a workspace: Working from home is not possible for many self-employed people. Even for those who can, having a dedicated workspace is often viewed as an essential part of professional identity. Yet adequate workspace in London is hard to obtain, and often unaffordable for many self-employed workers.
Central government decides on tax and welfare issues, which lie outside the focus of this report. But the Mayor of London, boroughs and employers can act to support London’s low-paid self-employed workers as the UK emerges from the COVID-19 crisis.
The Mayor of London should:
- Encourage the adoption of a Client Charter of good practice by London
employers who contract self-employed workers, and investigate the
potential for an accreditation scheme. The Charter should be focused on:
- Paying self-employed workers fair fees.
- Paying self-employed workers on time and for last-minute cancellations.
- Upholding anti-bullying, harassment and sexual harassment policies for self-employed workers, as well as complaints procedures.
- Upholding health and safety standards for self-employed workers, as set out by the national Health and Safety Executive.
- Offering mental health support schemes to self-employed workers, where they are also offered to employees.
- Reviewing procurement processes to ensure these do not put self-employed workers at a disadvantage – particularly workers from under-represented and disadvantaged backgrounds.
- Offer grants to develop existing mentorship portals that support self-employed workers in the capital. The funding could help existing sites develop their network of mentors within the self-employed community,
offering them reimbursement for their time and ensuring that support is
London boroughs should:
- Ensure that support available to self-employed workers is advertised to
groups who are more likely to need it.
- Explore the development of online support and training courses for self-employed workers.
- Continue to secure long-term affordable workspace for self-employed
workers through planning policies.
- Keep and publish a list of empty commercial spaces. Boroughs usually
know which commercial units are vacant from their Business Rates Register. They should make this list user-friendly, so that potential workspace operators are aware of new opportunities.
Organisations who contract self-employed workers should:
- Sign up and adhere to the standards as set out in the Client Charter.
- Contribute to the cost of training and development for self-employed
workers where this could increase opportunities for disadvantaged and
under-represented groups, or where there is a mandatory requirement
for professional standards to be maintained and updated.
The UK government should:
- Establish and fund a single body to improve the enforcement of
labour market rights for self-employed workers. Central government has
announced its intention to simplify the processes that allow workers
to uphold their rights: it should ensure that these allow self-employed
workers to raise concerns easily, as well as enabling the swift investigation
Trade unions should:
- Encourage employers to sign up to the Client Charter.
- Continue to collate and promote the types of support available to self-employed workers.
- Develop or strengthen peer-to-peer support for self-employed members.
- Explore the potential and viability of mutual support schemes for self-employed workers.