Self-employed sector undermined and diminished by events of 2020

New research from IPSE, the Association of Independent Professionals and the Self-Employed, claims that the number of solo self-employed people in the UK has fallen by 5 per cent compared to last year. The total number of solo self-employed (excluding those who have others working for them) has fallen from 4.6 million in 2019 to 4.4 million. Until now the sector had been growing continuously for 11 years – by a total of 40 per cent.  

The decline has been uneven across the self-employed landscape, with the sharpest falls among 18-29-year-olds (-11 percent), less highly skilled male self-employed (-11 percent) and disabled self-employed people (-8 percent). There was also a sharp drop among 40-49-year-olds (-7 percent).

There was significant variance across the UK, with the sharpest falls (all by 10 percent) in Yorkshire and the Humber, the East of England and Wales. The only increases were in the East Midlands (+4 percent) and Northern Ireland (+17 percent).

The report suggests that one in seven people in the sector (15 percent) said they became solo self-employed between 2019 and 2020. This equates to 591,000 people who would not have been able to access the government’s Self-Employment Income Support Scheme (SEISS). The fact that this and other significant groups such as sole directors of limited companies were excluded from government grants may have played a part in the enormous increase in self-employed people accessing Universal Credit. The number of solo self-employed accessing UC rose by 341 per cent from 47,000 in 2019 to 206,200.

The picture is very uneven in terms of skills and occupations, too. The sharpest fall was in Standard Occupational Category (SOC) 8, which includes process plant workers and machine operatives. The number in this group fell by over 90,000 (20 percent) between 2019 and 2020. By contrast, there was actually an increase in two of the most highly skilled groups: (professional occupations) grew by two per cent and SOC3 (associate and technical occupations) grew by three per cent.

Looking at specific occupations, the number of people working in the biggest solo self-employed occupational group, construction and building trades, dropped by eight per cent to 405,000. Road transport driver numbers fell by 20 per cent to 261,000 and agricultural and related trades occupational numbers fell by 18 per cent to 175,000.

Among highly skilled freelancers, the biggest freelancer group – skilled artistic, literary and media occupations – remained roughly stable at 16 per cent of the freelance sector. However, the second-biggest freelancer occupational group, managers and proprietors, grew by two per cent. The third-biggest group, teaching and education professionals, shrank by 11 per cent. There were sharp declines in the number of public service professionals (-29 percent), mangers and proprietors in hospitality and leisure services (-18 percent) and engineering professionals (-17 percent).