The Government should do more to help and support the self-employed, says an independent review chaired by the CEO and founder of The Satchel Company, Julie Dean OBE.
The number of self-employed in the UK is at an all-time high of 4.6million, representing 15% of the UK workforce, with current trends suggesting this will continue to grow in coming years.
Most self-employed people have made the positive choice to work for themselves, mainly due to a fairer work/life balance, while others may have lost their jobs during the financial crisis and would prefer to work for an employer.
According to the Government commissioned review (pdf) into self-employment, while self-employed people are often happier than those who work for an employer, they also miss out on “vital” support.
It is becoming more imperative that the needs of the self-employed are addressed and the right support made available. But the review highlights how self-employment is excluded when calculating the impact that new policies will have on different sectors.
The review, says “choosing to be self-employed should not mean that people are disadvantaged in the support that they receive from Government”, whilst calling on the Government to “consider extending support to the self-employed in areas where there is discrepancy between support for the self-employed and support for employees”.
In particular, the review recommends “enhancing the level of Maternity Allowance provided to the self-employed in the first 6 weeks – bringing Maternity Allowance in line with Statutory Maternity Pay”. The remaining 33 weeks should be paid at a lower statutory flat rate or 90% of earnings.
It also calls for a new ‘Adoption Allowance’ to help self-employed adopters. This should be enhanced to 90% of earnings in the first six weeks, bringing it in-line with Statutory Adoption Pay. As with ‘Maternity Allowance’, the remaining 33 weeks should be paid at the lower of the statutory flat rate or 90% of earnings.
The review says: “The support provided by Government to those starting or extending a family should be consistent whether the beneficiary is employed or self-employed.”
Recent research by Citizens Advice found three in five full-time self-employed parents take less than seven days off after their baby is born, compared to two in five employed parents.
The charity says a self-employed mother with a new baby can only claim maternity allowance, which is paid at a fixed rate and does not reflect their usual income.
Since 2011, the number of people turning to Citizens Advice for help who are in work and self-employed has increased by 50%, with more than half of these earning below the National Minimum Wage.
Gillian Guy, chief executive of Citizens Advice, said: “Many of this review’s recommendations will be music to the ears of self-employed people.
“Self-employed people tell us about about challenges they face, such as getting advice and guidance when they start out working for themselves, as well as the lack of availability of flexible finance options – such as loans or mortgages – which work for them.
“It is great to see Julie Deane’s review echo many of these points and we hope that the Government will give her recommendations serious consideration.
“In particular enhancing maternity allowance would be a real boost for self-employed women when they have a baby and, given that over two thirds of self employed people are men, there is also an opportunity for government to consider similar support for fathers by giving them the same paternity pay as employees.”
Concerns were also expressed in the review over the level of advice available to the self-employed, who are often forced to turn to “whichever networks and forums they feel most comfortable with to keep their knowledge base current”.
“A central portal from which to navigate impartial support and services available to the self-employed is vital”, the review says.
In an embarrassing and highly critical look into the Government’s own website, researchers recommend that it be reviewed to determine how well it signposts the self-employed to already available resources.
Self-employed workers interviewed as part of the independent review expressed concerns about their lack of business knowledge regarding finance, cash flow, bookkeeping and taxation. The report says these skills “are still lacking from our Curriculum” and “would benefit many adults regardless of their employment status”.
The review concludes there is “a clear desire for equal treatment and recognition from the Government for the self-employed”, but Julie Dean says “the private sector also has a key role to play”.
This article was last updated at 01:01 on 15 February 2016 to include a comment from Citizens Advice.