Securing leadership talent

Gemma Prescot, Head of Interim Management, discusses the impact IR35 rules have had for interim positions in local authorities.

It is now a year since new ‘off-payroll working’ rules – known as IR35 rules – came into force for public sector employers. These rules apply to workers who provide their services to a client through an intermediary and, depending on individual circumstances, can require such workers to alter their taxation arrangements. This can frequently be the case for senior interim workers.

So, what impact have the IR35 rules had for interim positions at local authorities?

Immediate impact

The IR35 rule change came against a backdrop of severe budget cuts, spiralling demand and increased pressure to demonstrate cost efficiencies for local government.  As a result, councils have had to think very carefully about their interim senior resourcing.

At Campbell Tickell we have encountered some local authorities that will not appoint interim workers outside IR35 rules. We also have several interim workers, with long track records in the market, who do not wish to be considered for roles within IR35.

A year on, the client and candidate market seems to have settled down to some extent, demonstrating that things can work within the limitations of IR35. But we are still alert to and working with some of the more nuanced

Managing IR35

From the point of view of an interim worker, roles that fall outside IR35 rules are more favourable, in allowing for the flexibility that is the norm for people used to working in this way, with a mix of short and long-term assignments, and sometimes two part-time assignments running simultaneously. With such placements we have been able to continue to provide clients with candidate lists that give choice as well as assurance on strength and breadth of experience, at competitive day rates.

Those interim workers who have advised us that they no longer wish to be considered for roles that fall within IR35 are considering roles with housing associations, private companies and charities, which are not required to comply with IR35. Some of our candidates have found that the competition for a non-IR35 placement has now increased,but are willing to offer our clients increased flexibility to give themselves that competitive edge.

It is important to note that, despite reassurance from HMRC to the contrary when IR35 rules were introduced, day rates have increased by about 20% for contracts that fall within IR35 rules. This is because interim workers in these contracts feel they have no choice but to increase their rate to cover expenses for travel, accommodation or subsistence. However, despite a more limited supply, our deep pool of experienced interim workers means we have made some very good placements within IR35 rules this year.

Although the introduction of the IR35 rules has presented challenges, we have continued to grow our market share in the senior interim local authority marketplace – indeed 2017 was our most successful year. We have picked up some useful lessons along the way.

Keep an open mind

Our advice to clients is this: when you are preparing a brief, be open to considering our advice on the best way to meet your need for a high-calibre interim resource. Our interim workers offer flexibility, as well as good value for money. They will appreciate your strategic and operating context from day one and bring extensive experience to help address your particular needs.

For candidates, if you are in a position to remain firm about not taking on an IR35 contract, communicate that to us and we won’t bother you unnecessarily.We recommend, however, that you too remain open. While IR35 may challenge some of the practicalities of an interim placement, many candidates in the field feel they
are delivering on interesting assignments that bring rewards.

At Campbell Tickell we believe 2018 will be a strong year in the local authority market as we continue to grow our offering, taking on an important advisory role with both our clients and candidates through our multifaceted recruitment and consultancy approach.

Contact us to find out more. Call Gemma Prescot on 07904 497 016

This article also appears in CT Brief, Issue 35