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Research reveals 1.4 million freelancers and contractors in the UK

There are now 1.4 million freelancers and contractors working in the UK, according to new research carried out by the Small Business Research Centre at Kingston University on behalf of the Professional Contractors Group (PCG). And that figure might be on the low side, as construction professionals do not appear to be covered in the findings.

The findings demonstrate that the freelance and contracting sectors represent highly skilled workers from very diverse backgrounds, with there being no such thing as a ‘typical contractor’.

What is a freelancer?

As part of the study, Defining and Estimating the Size of the UK Freelance Workforce, researchers were tasked to create a definition of what freelancers actually are, and the report concludes that freelancers and contractors are:

  • Neither employers nor employees
  • Skilled professional workers
  • Supplying services to a range or succession of clients
  • In commercial (‘self-employed’) relationships with their clients
  • Working for a fee.

No part of the researcher’s definition points to freelancers and contractors having an employment relationship with their clients; this undermines the government’s and HMRC’s assumptions about the sector, which have resulted in ever-more-strict IR35 legislation and enforcement.

Although linked by the common characteristics above, freelancers and contractors come form many different backgrounds and are variously described as:

  • Freelancers
  • Contractors
  • Portfolio workers
  • Consultants
  • Own account workers.

Freelancers and contractors use a variety of trading vehicles, notes the report, including limited companies, sole traderships, partnerships and contractor umbrella companies.

Sector breakdowns

Surprisingly for those who assume contracting to be an IT and engineering phenomenon, the largest group of freelancers is defined as ‘managers in other service industries’, with 127,000 workers in the category. Perhaps less surprisingly, other key statistics highlight that there are:

  • 65,000 IT contractors
  • 52,000 engineering contractors.

Construction professionals do not appear to be covered in the findings, which could add a significant number of workers to the total.

The report’s co-author, Dr John Kitching, highlighted the importance of such flexible, highly skilled workers to UK PLC: “Freelancers play an important role in the UK economy, ... in their numbers, their contribution to business turnover and in the range of activities they perform. But there is no ‘typical’ freelance worker; they vary in their personal, work and organisational characteristics.”

1.4 million workers should have a voice

With hard evidence from a credible source that the freelance and contracting sector is substantial, will this mean government will start to take notice of their concerns?

The PCG’s managing director, John Brasier thinks it should: “This is an extremely valuable snapshot of the freelance workforce; it also shows that there is much work still to do in order to build up a really detailed and thorough picture of the market.

“As the only non-profit association that represents the UK’s freelancers, we continuously strive to make freelancers’ voices heard by government – the freelance community has grown over the last ten years and all the signs indicate that it will continue to grow; it is our job to ensure that government listens to freelancers’ needs.”

This is an extremely valuable snapshot of the freelance workforce; it also shows that there is much work still to do in order to build up a really detailed and thorough picture of the market

John Brasier, PCG

The Kingston University study is the first of its kind and, as Brasier explains: “[It] gives us a credible outline of the size and characteristics of our dynamic freelance workforce, which has not existed up until now.”

Now that the freelance and contracting markets have been to a degree quantified, government has the opportunity to respond with measures that protect and support this dynamic and vibrant sector.

Published: 17 September 2008

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