Contractors working through umbrella companies or their own limited companies may derive some comfort from the latest CBI report, “Mapping the Route to Growth”, which emphasises the vital importance of flexible working solutions to the UK’s economic health.

Whilst the report draws attention to some stubborn structural problems in the UK’s workforce – specifically, the persistence of substantial pockets of under-skilled workers in some regions – it also advocates the increased use of temporary contract work, the bread and butter of most PAYE umbrella contractors.  The CBI’s research suggests that by adopting more temporary contracts, businesses can respond rapidly to surges in demand without fearing longer-term consequences in the event of the demand dissipating.  Temporary work, the report suggests, also allows staff to calibrate their working lives with their personal lives far more flexibly, as well as providing valuable opportunities to build experience and acquire new skills.

Welcoming the research, the REC’s Head of Policy, Gillian Econopouly, said, “Agency work is also typically more accessible to young people and ethnic minorities than permanent employment, and so helps break down the exclusion that risks becoming a major structural problem in the UK economy”.

The structural problems noted in the report involve the progressive disappearance of low-skilled jobs, which previously acted as entry points for people moving out of unemployment.  However, the research also shows that increasing use of part-time posts helps reduce unemployment in an area.

CBI Director General John Cridland urged the government to apply the same rigour it deploys in tackling the structural deficit in the public finances to attacking the structural jobs deficit, adding: “Only private sector growth can create the jobs we need and we must ensure the fruits of recovery are felt in every region.”

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