Education and Health & Social Work sectors, and considered implications for employment, costs incurred and any process changes required.
The research consisted of a quantitative survey of 117 central bodies (covering 4,095 sites) and 100 individual sites in the public sector, all of which had recent engagement with off-payroll contractors; and qualitative follow-up interviews with 30 respondents whose responses indicated they had been affected by the reforms. Survey fieldwork took place between August and October 2017. Given that the off-payroll working reforms only came into effect in April 2017, the findings are focused on the bedding-in period immediately after the reform came into effect and so reflect public bodies’ very early experiences. Throughout the report, the term ‘central bodies’ refers to organisations who deal with the administration of off-payroll working reforms for more than one site. For instance, an NHS trust could be responsible for managing the reforms across a number of different hospitals and practices. Research findings for central bodies are reported separately from individual sites that are only responsible for the administration of off-payroll working reforms at their own site. Workforce structures Survey results suggest that so far, the reforms have had minimal impact on how public bodies recruit, with in year changes primarily attributed to wider factors, such as natural fluctuations in the workforce and long-term financial constraints. In line with expectations, public bodies reduced their use of off-payroll contractors. Central bodies reported that they employed a mean average of 12 fewer off-payroll contractors in August 2017 than they did in March 2017, while sites reported employing four fewer contractors. The median change suggests the reforms typically had little overall impact on the use of off-payroll contractors (central bodies: zero, sites: one fewer). However, survey data showed that where public sector bodies provided paid employee figures for both March and August 2017, there was a fall in employee headcount. Central bodies reported employing a mean average of 21 fewer employees in August 2017 than they did in March 2017, and sites reported employing 19 fewer, on average. Nevertheless, the median change between the two periods was zero among central bodies and sites; suggesting the scale of change was negligible overall. While the evidence shows reductions in the number of paid employees and in the use of off-payroll contractors, results show that amongst central bodies off-payroll contractors made up a smaller proportion of the workforce after the reforms came into effect. On average, there were 102 paid employees for every off-payroll contractor in March 2017 compared to 185 paid employees for every off-payroll contractor in August 2017. This indicates that amongst central bodies the number of off-payroll contractors fell at a faster rate than the number of paid employees between March and August 2017. Conversely, amongst sites, results indicate that the number of paid employees fell at a faster rate than the number of off-payroll contractors between March and August 2017. On average, there were 76 paid employees for every off- payroll contractor in March 2017, compared to 65 employees for every off-payroll contractor in August 2017. Qualitative interviews showed that in some cases, off-payroll contractors had left public sector bodies after being declared within the rules, but were replaced with other off-payroll contractors willing to work within the off-payroll working rules, resulting in no overall change to contractor numbers. In a few cases, numbers decreased because more off-payroll contractors were moving onto payroll as paid employees, or because off-payroll working reforms had prompted public bodies to review the extent to which they needed to use off-payroll contractors. The research explored how the impacts of off-payroll working reforms differed between off-payroll contractors who were engaged directly by public sector bodies and those engaged via agencies. Public bodies reported using fewer directly engaged off-payroll contractors in August 2017 than they did in March 2017 and fewer contractors engaged via agencies. However, the size of the changes was not significant in each case. Most central bodies (75%) and sites (82%) had used umbrella companies at any point in the past but reported no increase in their use since the reforms came into effect. Despite being considered a potentially hassle-free alternative work structure, exempt from off-payroll working rules, only a small minority of central bodies (11%) and sites (6%) had increased their use of umbrella companies, although all of those who reported that they had done this said that this was due, at least to some extent, to the off-payroll working reforms.
The research found little evidence of contractors turning to self-employment to avoid off-payroll working rules.
Filling vacancies
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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