This article is written by By Prof Robert Blackburn, Professor of Entrepreneurship, University of Liverpool Management School.
New research has found that 28% of self-employed workers are struggling to meet basic expenses, according to a study by the Centre for Economic Performance (CEP) at the London School of Economics and Political Science (LSE) and the University of Liverpool Management School.
Robert Blackburn, Professor of Entrepreneurship at the Management School and co-author of the ‘Covid-19 and the self-employed: 18 months into the crisis’ report said: “The pandemic hit some self-employed workers harder than others. Those self-employed workers who are parents, women and younger report greater financial difficulties, suggesting that the uneven impacts of the crisis will continue.”
While the majority of self-employed workers said they had more work in August 2021 compared to January 2021, reported incomes and profits were still lower than those pre-Covid.
A CEP survey indicated that a third of self employed workers have consistently doubted whether they are eligible to apply for a grant under the Self-Employment Income Support Scheme (SEISS). HMRC confirmed that around 2.9 million self employed workers have claimed at least one SEISS grant but the report suggests that grant applications have fallen, largely due to confusion over eligibility criteria and that clearer information was needed to support take-up of grant opportunities.
In addition, new entrants to the self-employed sector are increasing again but they tend to struggle more when faced with uncertain economic conditions than those more established self-employed workers.
The report concludes that the self-employed have experienced consistent negative impact due to the pandemic and continue to face financial hardships, with income and profits not yet reaching pre-Covid levels.
FSB research shows that entrepreneurial confidence declined in every quarter this year, and that 400,000 small businesses have been lost over the pandemic to date.
“The Government must provide business support measures that reflect these new realities and give firms a fighting chance. It should reinstate the covid sick pay rebate, increase the current 66% business rates discount for hardest-hit firms to 100% and increase in the targeted Employment Allowance to £5,000, which would make a real difference.
“Policymakers also need to accelerate delivery of the £1.5bn business rates relief fund - launched many months ago but yet to pay out a penny. Further, businesses need greater clarity – both in terms of exactly what’s expected of them in relation to Plan B as well as transparency around what Plan C would look like – so they can plan ahead.”
The fourth LSE-CEP Survey of Self-employment was carried out from 15-25 September 2021. The results are based on 1,500 responses. The responses are weighted to represent the population of self-employed workers. For access to the full report, see https://cep.lse.ac.uk/pubs/download/cepcovid-19-025.pdf or please email [email protected]