The Government’s apparent eagerness to appease the media’s synthetic fury over the use of personal service companies in the public sector has come under more fire from industry experts, the news source ContractorUK reports.

Plans to tighten the rules on ‘off-payroll’ staff coincide with a 20% surge in the recruitment of interim management contractors, a first quarter Mori poll reveals. As things stand, the Interim Management Association maintains, the rules will force many such contractors to cease working through limited companies or abandon their roles – a development the IMA believes could ruin a thriving and popular sector.

IMA Chairman Jason Atkinson remarked: “The current proposals risk undermining the value of genuine interim management as an effective resource model and a cost saving alternative to management consultancy. We simply cannot ignore the fact that increasing numbers of businesses are benefiting from the ability to quickly deploy highly skilled, independent executives on short-term contracts to deliver specific results immediately and effectively.”

Mt Atkinson went on to say that interim management contractors are themselves “extremely reluctant” to work on a permanent, directly employed basis. The rules governing ‘controlling persons’ will apply to private firms as well as public sector organisations, with the result that the new ‘get tough’ approach could savagely affect financial services and hobble the already-fragile prospects of economic recovery even further. Local government is also likely to suffer, as it represents 48% of public sector interim roles.

REC Director Tim Hadley condemned the move to force all designated as controlling persons onto payroll, arguing instead for effective, nuanced management of contracts and staff rather than the government’s “restrictive, one-size-fits-all regulation.”

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