Public sector IT: what's afoot for contractor skills

No changes. Marked changes. Changes being made right now.

That’s the three-fold, somewhat paradoxical story of the public sector for IT contractors and it’s a story you can’t afford to miss, writes temporary computer staff specialists Mortimer Spinks and Harvey Nash.

Let’s start with the elephant in the room -- the changes to IR35 which were made across the sector in April. Well, that’s where no changes have occurred. In fact, very little differs since the second quarter in terms of the technology skills actively sought today on a contract basis.

So much as there was back in April 2017, there is today a large demand from public sector bodies for IT contractors who have development skills. The ‘hottest’ of these -- which are sought-after in the private sector too -- are:

  • Java
  • JavaScript
  • DevOps
  • Scala
  • PHP

However, the impact of IR35 changing has been obvious elsewhere. Indeed, ‘marked change’ due to the reforms doesn’t quite cover it. We would go so far as to say that there's been actual disruption since April around the approach public sector organisations have taken (and are taking) to talent resourcing.

Nuclear, 'no' and now

Even more than six months in, as we are currently, we’re still noticing a huge variance in the understanding from organisations of what is required to ensure compliance with the off-payroll rules.

Some end-users have opted for the ‘nuclear approach’ -- dumping all contractor roles inside IR35. As is to be expected, the result of this far from ideal. Many contractors simply say ‘no.’

But of the IT contractors who are interested, they can expect at least a 20% uplift in the day rate to cover the additional costs they expect to incur. It really is part of the public sector story you can’t afford to miss -- some end-users have hiked their rates by as much as 30%.

This has not come about by magic however. We’ve worked with the vast majority of our public sector clients to help them develop better, more objective workforce management practices and processes. Put another way, a lot of public bodies have gone through the pain of developing better workforce planning practices, so they can now say with confidence if a role is inside or outside IR35.

This greater appreciation for total workforce planning is also causing public sector bodies to assess how they engage with contractors as a whole. Ongoing as we speak, this relook by clients extends to them looking at their hiring practices and their long-term resourcing strategies.

We believe our initial investment of time and effort is now paying dividends. Public sector end-users are now more confident in their understanding of the updated IR35 legislation, and the temporary IT roles they’re filling. It’s helping keep contractor costs down but their talent pool as large as possible. So that’s the last chapter -- for now. We’ve had ‘the beginning’ of there being no change to skills requirements; ‘the middle’ being changes to talent resourcing, but it’s unlikely to be ‘the end’ of the IR35 public sector story.

Editor’s Note: The authors were Rob Pestridge of Mortimer Spinks, Colin Morley of Harvey Nash Recruitment Solutions and Lauren Grainger, also of Harvey Nash.

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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