A new study from workplace management software company Condeco shows that UK productivity continues to lag substantially behind levels achieved in other G7 nations.

Yesterday’s release of the final estimate for the International Comparison of Productivity by the Office for National Statistics (ONS) confirms that British productivity remains 18 per cent lower than the average hourly output across other G7 nations. The research also states that the UK can make substantial advances toward improved productivity by embracing new technology designed to unlock the potential of flexible working.

Condeco Software’s CEO, Peter Statham, observed that the key finding is that flexible working boosts productivity not simply by permitting employees to work when and where suits them best but also because it hands them a measure of autonomy that serves to empower them.

Mr Statham highlighted advances in workplace technology that have enabled a far more streamlined means of introducing flexible working, adding: “Business leaders can make their office spaces responsive to the requirements of their flexible workforce, and collaborative technologies have made working together from multiple locations a real possibility. Employees have been calling for increasingly flexible working structures for a while, and the technology ensures that these measures are now not only possible, but productive.”

Implicit in the findings of both surveys, however, is another method of improving productivity through flexible working: drawing on the talents of the UK’s continually-growing pool of highly-skilled contracting professionals. Umbrella Company Employees and other contractors are frequently drafted in by SME businesses, which may lack the means to employ such expertise in-house on a permanent basis but can access it via project-based contract work to complete business-critical missions or to handle periods of intense demand.

At a time when the case for enhancing UK productivity could not be more compelling, however, the government is planning to severely damage the highly-skilled flexible benefits contractors can deliver to so many businesses. Under a furtively artful twisting of the definition of supervision, direction or control (SDC), the government has massively expanded its reach to encompass huge numbers of previously independent contracting professionals.

From 6th April, should the proposed change be implemented, these highly-skilled flexible workers will no longer be able to claim tax relief on the considerable travel and subsistence costs they incur on their journeys to often distant temporary workplaces, losing around one-third of their income in the process.

It is hard to see how this measure could possibly improve productivity: contractors are likely to stop travelling long distances, significantly limiting the number of end clients they serve, or increase their pay rates substantially, hitting company and public service budgets.

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