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“Down The Drain!” – Public Sector and IR35 Reforms

It’s no secret that many public sector contractors were planning to down tools and head towards the private sector. The reason? IR35 of course.

Since these IR35 reforms came into effect earlier this year many experts have observed the so called “talent drain” from public to private…with one pundit quipping that the public sector is going “down the drain!”

This comes after a survey of nearly 1500 recruiters who hire contractors on a daily basis, and their opinion? What they have noticed is that public sector contractor placements have fallen off the map over the last few months, with 70% of recruiters noticing the shift towards the private sector.

I could have told you that…as regular readers of this blog will be all too aware. It’s just common sense though isn’t it really when you think about it, because if contractors are better off elsewhere and making more money they are going to take advantage of the opportunity, not sit around watching the clock while working for the government.

Samantha Hurley, the director of operations at the company behind this survey agrees with me, she said, “As we feared, it seems that these changes have had an adverse effect on the supply of contractors to the public sector.”

Some experts and pundits have even put a number on the amount of contractors who will eventually make the move from public to private, with 85% being touted as the total.

This is almost like the old days of the American frontier if you ask me, where thousands of Americans made the move from East to West, all in search of gold and new opportunities.

Only this is 2017 and it is the UK contracting scene, but that doesn’t change the fact there is a new gold rush to get excited about, but only if you make the move to the private sector. Those who stay put in the public sector, you miss out.

Julia Kermode, chief executive over at the Freelancer and Contractor Services Association, or FACSA as some people like to call them…she also agrees with me as this was a recent statement made by her…”We have seen decisions being taken by the public sector banning all workers who operate through their own limited company This has seen many contractors deciding to leave the public sector.”

Maybe the private sector gold rush won’t last for long though? Reports are suggesting that IR35 is going to be introduced there as well at some point, which of course, would totally annoy the vast majority of contractors.

Not only that, but the survey shows us that 78% of recruiters think that IR35 in the private sector would damage the UK economy as a whole, especially with Brexit just around the corner.

My message to contractors is make the most of the private sector while the times are good. Who knows, you might even be able to take an early retirement before IR35 comes in. Keep making that money.

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