Local authorities: are you thinking about the IR35 opportunity?

Jes Ladva, Head of our Government Practice, explains why the roll out of IR35 in the private sector will make local government attractive to independent talent

Coverage of IR35, the government’s anti-avoidance tax legislation, has been fairly consistent over the past couple of years. What it means to fall ‘inside’ the legislation, how employers need to amend their resourcing practices for those they hire, and the negative consequences for the UK’s growing self-employed community are all topics that have received mounting attention. Yet, with IR35 set to land in the private sector next April, no one is talking about the opportunity it brings. But for local authorities, IR35 is just that.

You would however, be forgiven for thinking otherwise. Following the previous implementation of the legislation, the public sector not only suffered an exodus of much-relied upon freelance and contractual employees, but also saw highly-experienced public sector talent opt to limit future work if it fell inside IR35. Rather than the simple ‘revenue raiser’ Philip Hammond intended, it quickly deprived public organisations of vital experience and easy-to-access knowledge that has taken some years to rebuild.  

Come next April however, and everyone will be playing by the same rules. It means that the public sector – which has over two years’ experience implementing off-payroll working – now has the upper hand over private organisations that for the most part, remain wilfully ignorant of the legislation. With such a mass of prior knowledge covering both generic and specialist roles, local authorities need only reach out and take the ‘first mover’ advantage that now presents itself. 

An ability to competently manage IR35 processes of employment, combined with the ‘moral’ appeal of public work, will make local authorities an attractive employer to the pool of independent workers. We can expect core functions such as DDaT, development, regeneration and change and transformation to receive a skills and experience boost as a result. Almost immediately, IT roles, programme managers, planners and consultants will also become easier for local authorities to recruit.

It is important to note that even with the pressures of IR35, the public sector is successfully adapting to the workforce of the future. Already, we are seeing the emergence of a mixed model of talent acquisition and retention in line with the challenges of any given time period. For example, as a consequence of leaner structures post-austerity, authorities are operating a smaller core of executive leaders, supplemented by specific independent talent that delivers on programme phases through the injection of specific skills and capacity.

With next April fast approaching, public sector talent strategies have the opportunity to become even smarter in their commissioning of independent skills and knowledge. All they need do is make the case to private sector talent affected by the neutralising of IR35 and align this message to a compelling public sector proposition. Armed with this, local authorities will be in a stronger position to plug skills gaps and overcome emerging challenges with access to a greater pool of talent.

For more information please contact Jes Ladva.