We are at the end of the first week of the election campaign and contractors have little more knowledge of what’s in store should any of the main parties win the election than at the start.
Like a phoney war, each main protagonist is posturing lots, but revealing little, as none of the main parties has yet published a formal manifesto that will enable us to discover what could be in store for contractors and freelancers after 6th May 2010.
However, the opening salvo has come from the Conservative camp, with Tory advisor Sir Peter Gershon revealing to the Financial Times how he has advised David Cameron to cut costs in the public sector. And there’s bad news, tempered by some possibly good news, for contractors.
No strategy revealed as manifestos are awaited
The Conservatives, Liberal Democrats and Labour are all guilty of obfuscating over the contents and release dates of their formal election manifestos, which would enable us to analyse how contractors will fare should any of them win power.
Labour has published a series of pledges that, on the face of it, bode well for contractors – there’s a commitment to create a ‘smarter, even more skilled Britain: one that generates more knowledge’. But the pledge is short on detail and at this stage certainly doesn’t have any substance – financial or otherwise – to back it up.
The Liberal Democrat Party claims it will cut regulation in its ‘pocket guide to policy’. However, some of its business and enterprise plans, such as insisting on free customer helplines under a Universal Service Code could massively increase the costs of doing business.
Conservative economic policy appears, superficially, to be contractor friendly and in favour of a less-restrictive free market model, reducing tax and business regulation. It, too, falls down on its lack of detail.
Tory cuts reveal worrying threat to contractors
According to reports by the BBC, Labour’s spending plans won’t be announced until its manifesto is published next week. The Liberal Democrats have committed to cut £15bn of ‘lower priority’ spending, but not yet said how. The forthcoming launch of its own manifesto will hopefully make that clearer.
But the picture is clearing on the Tory front. In his interview in today’s Financial Times, David Cameron’s adviser Sir Peter Gershon has recommended public sector cuts that could have a major impact on contractors. These include:
- Cutting agency and contract staff, not replacing leavers and redeploying existing staff into vacant positions, saving ‘perhaps £1bn to £2bn’
- Substantial cuts in government IT spending of between £2bn and £4bn
- Renegotiating supplier contracts and reducing expenses and consultancy costs.
On the face of it, these cuts look damning for contractors, particularly in the IT sector. But enterprising contractors could turn the cuts into opportunities, which may well end up actually working in the contracting sector’s favour.
Private sector opportunities from public sector cuts?
In the private sector, recruitment freezes generally work for contractors. That’s because most of the time the job still needs to be done by somebody, and, because contractors are business suppliers, they don’t appear as employee headcount. A public sector recruitment freeze therefore clearly works in favour of contractors of all types.
In the private sector, recruitment freezes generally work for contractors
For IT and interim management contractors specifically, slashed IT budgets may present a fantastic opportunity. This may seen counter-intuitive, but most public sector IT spend is with major corporate suppliers and when they walk away from partially completed projects, someone will have to clean up the mess, providing a wealth of opportunities for canny contractors.
It all kicks off next week
In fairness to the political parties, their silence on the details to date is understandable, as Parliament has still been sitting this week, dealing with a ‘wash-up’ period to finalise some important legislation. Sadly, this has meant some ill-thought-through legislation being passed in hours instead of debated over weeks. For example, the Digital Economy Bill – brought to us by a Minister for Digital Britain who doesn't know what an IP address is -- was pushed through with only 40 MPs even bothering to debate it.
Next week, each of the main parties will have to start revealing more detail about their spending plans and how they will be funded, as well as finalising policies affecting small business and the contracting sector.
ContractorCalculator will bring you analysis of all the key parties’ more detailed spending plans when they become available, together with expert insights into their likely impact on contractors and freelancers.
Published: Friday, April 09, 2010
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