Freeing up Employment

The fall in the unemployment rate seen over the past two months is directly linked to a sharp increase in the number of Britons who are now self-employed or freelancing, official data reveal.

Figures from the Office of National Statistics show that more than half the increase in the number of people in work between February and April this year, the most recent period for which data is available, was accounted for by self-employment or freelancing.

In total, 166,000 people moved into work during the three months to the end of April, the ONS said. Of those, 84,000 have moved into self-employment, while 83,000 have become employees. The rise in self-employment is the equivalent of a 2.1 per cent increase in the number of people working this way, while the increase in employed workers represents a rise of just 0.3 per cent.

The ONS’s figures show that by the end of April, 4.17 million Britons were self-employed or freelance workers, a rise of almost 5 per cent on the equivalent figure for April 2011, which was 3.98 million. By contrast, the number of employees was up by just 0.1 per cent over the same period.

The data is likely to fuel concern that the apparent fall in unemployment seen in recent months may not be entirely straightforward. The ONS has no statistics on what kind of work those new to self-employment and freelancing are getting – or how much.

However, Saif Bonar, the UK manager of Freelancer.co.uk, an online service that puts people who need work doing in touch with freelancers, said the big increase in self-employment could only partly be explained by the economic situation.

“The numbers of the self-employed are swelling at records rates because of a combination of job insecurity, technological advances that reduce set up costs and sites such as Freelancer.co.uk that provide thousands of jobs and clients in one marketplace,” he claimed.

By David Prosser, Editor of Freelancing Matters magazine