In an open letter to the Exchequer Secretary to the Treasury, FCSA has laid out its recommendations for addressing systemic issues in the UK’s labour supply chain. Co-signed by FCSA Chief Executive Chris Bryce and employment status expert Rebecca Seeley Harris, the letter calls for thoughtful implementation of proposed reforms, emphasising the need for balanced regulation and robust worker protections.
Tackling Gross Payment Fraud
FCSA highlights Gross Payment Fraud as a significant challenge in the public sector labour supply chain, with millions lost annually in revenue. Examples like the Ducas and PPS Umbrella cases demonstrate how ‘payroll pirates’ exploit gaps in the system, undercutting compliant businesses and jeopardising worker rights.
Worker Protections at Risk
The open letter stresses that while upcoming regulatory changes aim to improve tax compliance, they do not sufficiently address worker protections. FCSA warns that this oversight could lead to increased exploitation, undermining the temporary labour market.
Concerns Over Implementation Timelines
FCSA voices concern about the rushed timeline for implementing umbrella market regulations by April 2026. With the Fair Work Agency (FWA) and other critical reforms from the Employment Rights Bill not fully operational until 2027, the lack of alignment risks confusion and threatens jobs.
FCSA’s Recommendations
To ensure reforms achieve their intended goals, FCSA proposes seven recommendations:
- Delayed Implementation: Push the umbrella market regulations to April 2028 to allow for thorough consultation.
- Accreditation Mandates: Require all public sector temporary workers to be engaged by accredited umbrellas and recruiters.
- Legal Definitions: Define key terms like “umbrella company” and “inherently temporary” in statute.
- Cross-Whitehall Collaboration: Create a working group to address systemic supply chain challenges.
- FCSA Involvement in FWA: Include FCSA in the Social Partnership Board to share expertise.
- Review Response Commitment: Commit to addressing recommendations from FCSA’s Independent Review of the Labour Supply Chain, due in March 2025.
A Measured Approach for Long-term Benefits
FCSA is committed to advocating for compliance and ethical standards while supporting workers and businesses. FCSA Chief Executive Chris Bryce summarised the organisation’s position:
“The current proposals and timetable create a perfect storm for our industry and inflict serious economic damage, without actually solving any problems. Our recommendations aim to create a stable, compliant, and fair labour market that works for all stakeholders. Rushed reforms will undermine and destabilise these efforts. Ultimately, this discourages job creation and stifles economic growth, so it’s crucial we help the Government to get this right.”
FCSA remains a steadfast advocate for balanced and effective reforms that prioritise both compliance and worker protections.
Read the full open letter below: