Categorized | alan's blog

May you live in interesting times…

May you live in interesting times…

Never has the old Chinese curse seemed so relevant!

There was an interesting article on Radio 4 the other day as I was driving from the airport to work. It took the average UK family’s net income of £20,500 and used that to illustrate what the nation’s finances would look like on that scale. It turns out that the family would be borrowing £6,500 a year on top. That’s borrowing to spend on the weekly shopping, mind you, not borrowing to buy cars and houses and plasma screens. Worrying, isn’t it…

Then they looked at the various plans to cut that borrowing. The best case, apparently, would reduce it by around £250, leaving £6250. Not exactly encouraging.

So what would this mean for us freelances? Well if I knew that I’d be a rich man, but the obvious conclusion is that public sector spending will need to come down with a bit of a bump. That’s bad news if your contract is in the Public Sector, since the knee-jerk reaction of accountants everywhere is to ditch the agency workers first.

But it’s worse than that…

It means there are fewer jobs available for the freelance to apply for in the public sector, so they’ll have to look elsewhere. The problem is the market these days is so polarised into market verticals, that agents are usually incapable of putting people forward for a role if they aren’t already working in that vertical. So all the ex-public sector people become instantly unemployable.

And there’s more…

Also likely to be removed from full time employment are a raft of middle managers and back office workers. They’ll have to go somewhere, so there will be even more job seekers out there trying to grab whatever work is available.

And finally…

If the markets don’t like the new Government and their spending plans, then the stagnation in new business development will continue and contracts will become even scarcer. On the other hand they may see the new Government as the equivalent of the Second Coming and all of a sudden everything goes rocketing away. That would be nice, only I have the nasty feeling that the agencies are not so used to dealing with commoditised contractors that they will have to re-learn how to deal with a market where demand exceeds supply; after all, they haven’t had to for at least five years.

End result? Who knows; either there are fewer jobs to spread around more people and rates will be forced down for those in work, or there will be more jobs but proportionately more people going for them, meaning rates will be forced down…

Looks like an interesting – and slightly worrying- few weeks coming up.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Worries by privatenobby

Be Sociable, Share!

Leave a Reply

You must be logged in to post a comment.

  • Switch Accountants for FREE

    Switch Accountants for FREEAt K&B Accountancy Group we have introduced a simple and straightforward approach to changing accountants. We’re offering contractors, consultants and freelancers the opportunity to switch to K&B Accountancy Group for FREE without the need to pay for any ‘catch up’ or retrospective accountancy fees for the previous year’s accounts and corporation tax return* *T&Cs apply

our top 5 twitter posts


contractor accountants


twitter Join the conversation
Free Telephone Advice