A new report from Contractor Calculator has exposed the true damage the off-payroll changes are having – with IR35 reform causing chaos in the social care sector.

The report finds that local authorities in the UK are increasingly failing to meet current demand around social care, with staff shortages reported since the reforms kicked in.

As many local authorities have deemed all their contract workers inside IR35, there has been an exodus of sorts, as contractors seek higher pay elsewhere, or to contract in the private sector while they still can. Reforms could soon be coming there too of course.

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This exodus is coupled with caps on local pay introduced to the sector, aimed at curbing competition for agency staff. This also saw many people jumping ship in search of higher pay elsewhere.

The result is rising vacancy rates as IR35 reform causes chaos in the social care sector. Authorities are now starting to look to address these difficulties as the issue widens.

Problem areas

The problem is potent in rural areas, where caps on locum pay are limiting workers’ ability to travel for work.

Some private health and social care organisations are benefiting, as they are not government-funded and therefore not (yet) impacted by the IR35 reforms. But these services cost money to the patient, with vast numbers unable to even consider this avenue for care.

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This is a prime example of the maligned IR35 reforms causing huge problems in the public sector. The decision from the government to introduce them seems to be increasingly ill-judged, unfair and short-sighted.

Surely that should mean that risking similar bedlam in the private sector is a no go?

Apparently not. The blinkered nature of these decisions from the government is not earning them any friends. It is vital that before a final decision is made about reforming IR35 in the private sector, those organisations with their finger on the pulse are consulted and listened to.

A rash decision is not what is called for here. It’s time the government prioritised citizens and workers over convenience.

The full ContractorCalculator report can be viewed by clicking here.