New report: freelancers contribute £145bn to UK economy

Hudson Contract has backed new research showing that highly skilled freelancers contribute £145bn to the UK economy every year.

Analysis by the Centre for Research on Self-Employment, a respected international think tank, highlights how project-based freelancers add ‘immense’ value by fostering growth, innovation and entrepreneurship among both large firms and SMEs.

CRSE’s report, The Freelance Project and Gig Economies of the 21st Century, describes the 2.1 million strong community as one of the UK’s most productive and important economic assets.

Highly skilled freelancers give businesses access to flexible expertise beyond their fixed employees and allow firms of all sizes to manage shifting demand and compete with much larger businesses, added the report.

It reveals how the wider freelance economy is broadly made up of three different forms of work: project-based (73%), gig-based (14%) and portfolio-based (12%) with other freelancers making up the balance.

CRSE calculates that the community generates between £140-145bn every year as well as freedom and flexibility for individuals.

The report argues for a tailored and segmented approach to the freelance economy and an end to blunt, one-size-fits-all policies.

It concludes that policy should generally focus on enabling and supporting higher-skilled project work, while protecting and guarding against vulnerability among lower-skilled gig work.

Welcoming the findings, Hudson Contract, a leading supplier of specialist self-employed labour to the UK construction industry, said highly-skilled freelancers are “catalysts for innovation and improved productivity”.

It has launched a new company, Hudson Freelance, to protect businesses and the self-employed against the potentially disastrous fallout from new tax legislation.

The company is calling for progressive employment and tax policies to protect the economic benefits of specialist self-employment and make the UK more competitive in the global market.

Ian Anfield, managing director of Hudson Contract, said: “The Centre for Research on Self-Employment is looking to the future with this timely report into the important economic contribution of highly skilled freelancers.

“Industries like construction, manufacturing, IT, finance and media rely on the supply of specialist and flexible labour. Without highly skilled freelancers working on projects, it would be far more challenging for businesses to be innovative, productive and competitive.”

Ian contrasted the CRSE’s findings to the recent report from the government-appointed Construction Leadership Council (CLC), which called for a shift to direct employment to boost investment in skills, training and development.

He said: “The CLC report ignores the economic benefits of highly skilled freelancers in favour of an outdated employment model that would only serve to hinder projects and productivity, driving down quality and accountability. We need policies fit for the digital age not throwbacks to a different era.”

Hudson Freelance enables firms to engage self-employed consultants, professionals and technicians without the financial fear and administrative burdens of IR35 reforms.

Its model was upheld in a landmark employment tribunal, reported in The Times, which dismissed claims made by a self-employed surveyor.