On 15 June 2023, the House of Lords is due to debate the following motion tabled by the Earl of Clancarty (Crossbench):

To ask His Majesty’s Government what support they intend to give to freelancers and other self-employed workers in the arts and creative industries; and what assessment they have made of the case for a commissioner for freelancers.

1. What is a freelancer?

There is no specific definition of freelancer in UK employment law, but they are often self-employed contractors or consultants who work for different clients on a flexible basis. They can be engaged directly, through other companies, or through the freelancer’s own company (sometimes known as a ‘personal service company’).

As self-employed contractors, most freelancers pay tax through self-assessment, not through the PAYE system. This can have tax advantages to the individual, and to the client hiring the freelancer, as the client does not have to pay employer national insurance contributions. Freelancers can benefit from the greater flexibility and control that self-employment can bring, but they may also lose access to workplace rights such holiday pay, sick pay, pensions and the minimum wage.

2. How many freelancers are in the arts and creative sectors?

2.1 Self-employment statistics

Rates of self-employment are higher in the creative sectors than in most other sectors of the UK economy. Figures from the Department for Culture, Media and Sport (DCMS) showed that in the year to September 2022 there were 3.1mn filled job roles in the creative and cultural industries. These sectors included film, television, radio, computer gaming, publishing and the performing arts. Of those jobs, 989,000 were self-employed (32%). This was more than double the rate of self-employment in the wider UK economy (14%).

The creative industries are a significant contributor to the UK economy. In 2021, the creative sector contributed £109bn of gross value added to the UK economy, equivalent to 5.6% of the total that year. During the pandemic, the economic output of the creative industries fell, but it was less adversely affected than the UK economy as a whole.

2.2 Trends in self-employment in the UK economy as a whole

Prior to the coronavirus pandemic, self-employment had been steadily increasing in the UK economy, according to figures from the Office for National Statistics (ONS). Self-employment peaked at 4.7mn jobs in Q4 2019. This had been associated with a rise in the popularity of freelancing and flexible working arrangements over that period. Relatedly, there has been a debate about the rise of the so-called ‘gig economy’, in which online platforms such as Uber and Deliveroo provide piecework for self-employed contractors.

The ONS has said that during the coronavirus pandemic self-employment had “fallen considerably”, to 4.2 million by March 2022. The ONS attributed the decline to changes in employment status driven by the introduction of the coronavirus job retention scheme (also known as the furlough scheme). The ONS said:

Large increases in the number of self-employed workers remaining in the same job but reclassifying their labour market status to “employee” were observed between April and September 2020 (coinciding with the introduction of the furlough scheme) […]

Figure 1 shows the trend in UK self-employment since 2003. The decline in the number of self-employment jobs has not recovered to its pre-pandemic peak.

Figure 1. UK self-employment jobs (thousands) (seasonally adjusted)

Figure 1. UK self-employment jobs (thousands) (seasonally adjusted)

(Office for National Statistics, ‘UK self-employment jobs SA: Total (thousands)’, 16 May 2023)

3. Challenges for freelancers in the creative industries

In 2017, the Creative Industries Federation published ‘Creative freelancers’. The report was the result of a survey of over 700 creative freelancers and the businesses that employ them. The report stated that the creative sector is “built on an army of talented and skilled freelancers—from the film director to the games designer, the potter to the sound engineer”.

The report said that freelancers can bring “particular expertise to creative enterprises” and that freelancers can allow organisations to be “more ambitious with the projects they take”. However, it said that despite the sector being “reliant” on freelancers, “the self-employed in the creative industries feel invisible to policy-makers”. The report found that although freelancing was a choice for some workers, the majority of respondents said “it is the only way they can do their work, as the shape and type of many creative businesses mean there are not full-time staff positions available”.

The report made recommendations to government designed to “improve the working lives of this vital but undervalued part of the workforce”. The recommendations included:

  • make self-employment a specific ministerial responsibility within the government
  • introduce a post-Brexit immigration policy that “works for” freelancers, including a freelancer visa
  • support a skills and careers campaign for the creative sectors
  • pilot mechanisms to introduce “sustainable social security” for freelancers, including more flexibility within universal credit for the self-employed

Similar recommendations were made in a May 2021 report by the Creative Industries Policy and Evidence Centre (PEC), an organisation led by Nesta and funded by the Arts and Humanities Research Council. The report, ‘Freelancers in the creative industries’, said that although freelancers were an “essential and growing part” of the workforce, they were “poorly served by many parts of the policy infrastructure”. The authors claimed that creative freelancers “lose out in major policy initiatives” in three main areas:

  • Skills policy. The report contended that the self-employed often miss out on life-long learning opportunities and careers advice. It recommended that “no national skills policy should be written without fully recognising the structures, opportunities and limitations of freelance work”
  • Immigration policy. The report claimed that the creative sectors employed significant numbers of EU nationals and that post-Brexit the “most severe” skills shortages in the sector were in “high skilled occupations such as programmers, software developers, architects, and designers”. The authors recommended that changes to immigration policy should be made with the “economic needs of sectors like the creative industries in mind”, in particular the demands of “sub-sectors like design, screen, and the arts”.
  • Post-coronavirus support. The authors argued that the pandemic had “exposed the extent of structural challenges” in the self-employed workforce. They said that in designing ongoing support for the creative industries the government should consider that freelancers are “both the secret of the UK’s creative success but also the most vulnerable parts of these sector’s workforces”.

4. Government support for the creative sectors

In response to challenges posed by the Covid-19 pandemic, the government put in place extra funding for culture and the arts. This was in addition to wider support for employment and the economy.

In July 2020 the government announced the culture recovery fund, which included:

  • a £1.15bn support pot for cultural organisations in England delivered through a mix of grants and loans, made up of £270mn of repayable finance and £880mn in grants
  • £100mn of targeted support for national cultural institutions in England and the English Heritage Trust
  • a £120mn capital investment to restart construction on cultural infrastructure and for heritage construction projects in England which were paused due to the coronavirus pandemic

Specifically to support the self-employed during the pandemic, the government announced the self-employment income support scheme (SEISS) in March 2020. Initially the scheme paid taxable grants of 80% of someone’s average monthly trading profit, for a three-month period. The scheme ran through five rounds of grants, ending in September 2021. Statistics from HM Revenue and Customs showed that £28.1bn had been paid in grants in total (up to 28 October 2021). Across the five grants, 10.4mn grants were claimed by a total of 2.9 million individuals.

Further information on government support to the creative sectors can be found in section 4 of the House of Lords Library briefing ‘Arts and creative industries: The case for a strategy’ (1 December 2022).

5. Who has called for a commissioner for freelancers?

In November 2020, a coalition of organisations including the Creative Industries Federation, the Federation of Small Businesses, and the union Prospect called on the government to introduce a commissioner for freelancers. The organisations said the recommendation had been made in response to figures from the National Audit Office showing that nearly 3 million people were ineligible to claim the various forms of employment support during the pandemic. They argued that a commissioner for freelancers would “ensure that the UK champions innovation and entrepreneurialism as we emerge from the pandemic and re-establish ourselves on the world stage”.

The May 2021 report by PEC, referred to above, included the recommendation for a commissioner for freelancers. PEC repeated the call in September 2021 in its submission to the chancellor for the 2021 autumn spending review. PEC said the government should consider appointing a commissioner:

[…] to build more resilience in the UK’s self-employed workforce. One of the primary ambitions of this commissioner would be to ensure that government policies are fit for purpose for freelancers. The second priority should be to improve national data collection on types and structures of self-employment and ensure relevant data is being collected on operational structure and contract numbers.

The same month, the All-party Parliamentary Group for Creative Diversity published the report ‘Creative majority’, which also included the recommendation. It stated:

One of the primary ambitions of this commissioner should be to improve national data collection on types and structures of self-employment and to ensure resources are distributed more equally to those in different types of employment, including giving freelancers better access to benefits such as sick pay and parental leave. A freelance commissioner should also interrogate whether freelancers are overly relied upon in creative sector workforces.

The government was asked its view on the recommendation during a House of Lords debate on post-Covid economic recovery in January 2022. The DCMS minister, Lord Parkinson of Whitley Bay, did not commit to appointing a freelancers’ commissioner. However, he reiterated the financial support which had been provided to the cultural sectors and said he “would certainly be happy to discuss with freelancers and their representatives the challenges that remain as we continue to face the pandemic”.

6. Read more

Cover image by Caleb Oquendo on Pexels.