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Recommendations

Supporting London’s self-employed workers

Recommendations

The Mayor of London, London boroughs, employers and central government need to do more to support London’s low-paid self-employed workers as the city 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 better advertised.

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. There are clearly competing demands on developer contributions, but as we have highlighted, access to affordable workspace has been an increasing challenge for London’s self-employed. Whilst the pandemic may have taken pressure off some workspace costs, the city could also lose some of its workspace providers to the recession.
  • 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 of claims.

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.

Further considerations: safety nets and mutual support

This report has not discussed tax and benefits policy, as this has been the subject of previous work and is a matter for central government. However, we know that the tax treatment of self-employed work and the social safety net available to the self-employed has a large impact on wellbeing. It is also likely to remain a key policy issue, after the unprecedented state support paid out through the Self-Employment Income Support Scheme (SEISS).

One option for providing more social protection without eroding the autonomy that self-employed workers value could be to develop a mutual insurance system that workers could opt into.

Currently, self-employed workers can choose to become employed by an umbrella company, rather than setting up their own limited company. The umbrella company acts as intermediary between worker and client, offering some of the protections of employment as well as support with administrative work. At present umbrella companies charge relatively high premiums for these services – and so are used by higher earners.

While any self-financing mutual insurance system is likely to involve high premiums – thereby remaining out of reach for the low-paid self-employed – there might be a lower-cost model of umbrella employment, perhaps on a not-for-profit basis, that offers self-employed people on middle incomes some of the protections of employment.

Trade unions could explore whether there is appetite for such schemes among self-employed workers, who would be best placed to develop them, and (crucially) how much state sponsorship they would require.

Conclusion

Whilst many derive real satisfaction from self-employment, the risks and challenges are also significant. Many self-employed workers feel they are being taken advantage of by their clients, and a large section of the self-employed workforce is low-paid, unable to build up sufficient savings for rainy days.

The COVID-19 crisis has been devastating for the finances of many self-employed workers, and they will take years to rebuild. Addressing the issues that were holding them back even before the crisis will be more important than ever during the recovery period – especially as businesses returning to growth are likely to rely on freelancers before they are able to recruit again.