Coronavirus: IT contractors cite lack of government support during Covid-19 as source of stress

The government’s response to Covid-19 is cited as a major source of stress for contractors, who describe the package of financial support it offered during the outbreak as “inadequate and unhelpful”.

This was in response to a series of questions posed by contracting authority ContractorCalculator about the toll the pandemic has taken on the mental health and wellbeing of freelance workers, with many reporting issues with finding work and late payments during lockdown.

The questions garnered responses from 1,036 respondents, with 74.28% stating they predominantly work in the private sector, and 91.18% saying they provide services to clients via their own limited companies.

The vast majority also identified themselves as IT workers (47.9%), while the rest said they predominantly work in engineering (12.9%), financial services (12.07%), oil and gas (6.13%) or interim management roles (5.29%).

Of those questioned, 33.19% said they had not worked at all since the UK’s Covid-19 lockdown began in March 2020, and 28.08% said they had either lost some or all of their work since that time. However, 34.4% of respondents said their level of work had remained the same.

Nearly half (48.12%) of respondents said they had serious concerns about sourcing work during the pandemic, while 37.89% said they were “somewhat concerned” and 13.99% said they were not worried at all.

Even so, 46.45% of respondents said they had needed to lean on their savings during the pandemic to tide them over, with 50.31% admitting to suffering from “some” to “significant” financial hardship because of Covid-19.

This is on the back of clients freezing contracts, in the case of 39.87% respondents, and a marked slowdown in the amount of work coming their way in 40.92% of cases. A further 6.68% said they had also experienced late payments from clients since the onset of Covid-19.

When asked if the pandemic had “exacerbated” any pre-existing stressors for respondents, the yes and no vote was a near even split at 47.33% and 43.59%, respectively, but when asked if the pandemic had created any new stressors for participants, 70.41% said yes.

Respondents were then asked to identify these new sources of stress, and 54.81% cited the government’s response to the pandemic as a major stressor, while 49.04% said periods without work were causing them anxiety.

Issues about the amount of financial support made available by the government to the self-employed have been repeatedly reported on by Computer Weekly during the pandemic, particularly where limited company contractors are concerned.

Such contractors have been excluded from receiving support, for example, from the government’s Self-Employed Income Support Scheme (SEISS), which was announced in late March 2020.

Some 74.23% of participants in the ContractorCalculator poll said they were ineligible for support via SEISS, while 41.66% said they also did not meet the criteria to apply for financial aid through the government’s Coronavirus Business Interruption Loan Scheme.

Limited company contractors are eligible for support via the government’s Coronavirus Job Retention Scheme, but there are limitations on how much they can claim if the bulk of their income is made up of dividends.

For all these reasons, trade bodies and contracting stakeholders have repeatedly called on the government, since these support measures were announced, to do more to support limited company contractors through the crisis.

When asked in the poll if they thought the support made available by the government to the self-employed in response to the pandemic had been “adequate and helpful”, 77.3% of respondents said no.

Elsewhere, 69.35% of respondents said they strongly disagreed with the statement that the government’s response to the pandemic to date demonstrated that it has the interests of the self-employed at heart.

Dave Chaplin, CEO of ContractorCalculator, said the survey results highlight just how much of a toll the pandemic has taken on contractors, who were – at the time it hit – already grappling with the fallout from the now-delayed extension of the IR35 reforms to the private sector.

“Contractors have been heavily affected by Covid-19 and many have grave concerns about their future,” he said. “Government support for the self-employed has fallen short of the mark, so it is little wonder that our survey sees 70% of contractors feeling stressed.

“Confidence among the flexible workforce appears to be at an all-time low, at a time when the economy will be looking to those crucial contingent workers to underpin its recovery.” 

Chaplin added: “The off-payroll tax [IR35] combined with Covid-19 has hit freelancers hard, but this resilient workforce is staying active and busy, which seems like a sound tactic to help them navigate this difficult period.”