‘Frustrated’ Margaret Beels unveils Labour Market Enforcement Strategy 2023-24

A frustrated Margaret Beels has published Labour Market Enforcement Strategy 2023-24, criticising the government in the same breath as having to hand it 12 new recommendations.

Chief among her gripes is that ministers “stalled” the Single Enforcement Body (which was meant to regulate umbrella companies), and there’s still “no sign” of it remerging.

An ex-British Gas compliance head, Beels speaks in the 31-page report of her “disappointment” at no SEB, as stakeholders’ “most common concern” is umbrella companies.

'Questions about the value added of my function'

But the “absence of progress,” as Beels puts it, with the SEB is symptomatic of the government’s wider approach -- not just to labour market enforcement, but to her personally.

In fact, her October 26th report contains an indictment that will embarrass officials who appointed her, and likely make finding her replacement from November 2023 challenging.

“I feel the government’s commitment to the role of the Director of Labour Market Enforcement [DLME] could have been stronger,” begins Beels, who stands down this month.

“Repeated delays in clearing and publishing strategies that I and my predecessors have delivered on time, have delayed useful progress addressing harm to vulnerable workers and weaken support for compliant employers, raising questions about the value added of my function.”

'Redundant'

Professional Passport, a compliance organisation, says the report contains numerous paragraphs where Beels’ frustration “clearly rings out.”

The organisation’s CEO, Crawford Temple, says Beels clearly had an “uphill struggle” with the government to get labour market enforcement achieved or even just signed-off.

Law firm ReLegal Consulting also spoke yesterday to ContractorUK, to say Beels likely feels “redundant” -- not just at the treatment she received from the government, but because her successor may not even take up her recommendations.

'Clear frustration'

Julia Kermode, chief executive of payroll audit firm PayePass agrees Labour Market Enforcement Strategy 2023-24 conveys its author’s “clear frustration.”

“[And perhaps understandably so, because]…this strategy has taken seven months to publish, leaving only a few months for it to be implemented before April 2024,” the firm says.

Kermode believes Beels’ report is proof that the government’s approach to labour market enforcement is “lacklustre”, indicating, she said, that ministers ‘don’t really care about tackling worker exploitation.’

'Strategic Collaboration Plan'

To tackle exploitation, Beels (in effect) says that if the UK cannot have an SEB to protect umbrella contractors and other workers, its aims must be realised in other ways.

“This should include gap analysis of non-legislative aspects of the SEB and existing joint, collaborative and complementary activity by the enforcement bodies,” the report says.

“[It should also include] revisiting DLME’s functions to focus on where it can add most value including taking forward non-legislative aspects of the SEB.”

But the most welcome inclusion is that the enforcement bodies which the SEB would have housed (GLAA, EAS and HMRC NMW), must draw up a “Strategic Collaboration Plan.”

'No surprise about umbrella companies'

ReLegal Consulting founder Rebecca Seeley Harris said: “Alongside the report’s crucial recommendation to have a sufficiently well-resourced DLME office, I’m pleased the DLME has pledged to work with three other enforcement bodies to improve the current arrangements and create a Strategic Collaboration Plan.”

Founder of The Fair Umbrella Campaign, Seeley Harris regards proper funding for the DLME’s office (“well-resourced”) as all the more important now that the SEB is dead in the water.

“It’s no surprise that umbrella companies were the most common concern raised by stakeholders,” Seeley Harris told ContractorUK.

“The DLME has, however, acknowledged that the government has consulted on this issue so [she] does not include it in Labour Market Enforcement Strategy 2023-24.”

'Future strategies'

Asked if it’s odd that a labour market enforcement strategy report declines to make recommendations about what emerged as the biggest labour market enforcement issue, Professional Passport’s Mr Temple offered:

“As to the lack of detail on umbrella companies, Beels specifically says she is not addressing this, as the industry as a whole is expecting to hear more detail in due course.”

Kermode confirmed: “No recommendations are being made, as there is other work on regulating umbrellas already underway.

“[But] if that other work does not deliver, then I get the feeling we will hear more in [terms of] ‘future strategies.’ It has been a recurring theme since these reports started!”

'Tap into under-utilised data'

In her report, Beels indicates that the key to the work delivering is for HMRC and other enforcement bodies to “tap into the data that is currently being under-utilised,” paraphrased Mr Temple.

The 2023-24 Labour Market Enforcement Strategy states: “It is clear there remain sources of information, including, official, commercial and survey data, that are as yet untapped by the labour market enforcement bodies.

“We require a better understanding of what data sources we are underutilising, which would in turn enrich the current evidence base.”

'Agency Conduct Regs extension'

Such information-pooling is even more vital than extending the Agency Conduct Regulations.

Asked if he supports that extension (not proposed by Beels but apparently submitted to her by stakeholders as a better way than the government is proposing to regulate umbrella companies), Mr Temple responded:

“As we said in our response to the umbrella consultation, HMRC must get its targeted enforcement plans in place using the data they hold.

“This will give a true insight into the sector and help them to identify what changes are needed.  Currently, we are working in the ‘wild west’ and any new legislation is meaningless without enforcement. Without enforcement we are seeing greater market distortions which moves us further away from achieving the level playing field we need.”

'Race to the bottom'

Clearly exasperated, the boss of Professional Passport’s continued yesterday in a statement to ContractorUK: “And shelving the Single Enforcement Body means that the government must step up its enforcement activity to stamp out non-compliance in all its guises.

“Only by doing so will we ever be able to raise standards -- [whereas] currently we are seeing a 'race to the bottom,' when we need to be levelling the playing field so that the ‘good guys’ can thrive.  What is the incentive for the compliant businesses when they see non-compliant businesses winning?”

Beels ends her report by saying she is “looking” to ministers to “ensure there is continuity as regards having a director in post when my term comes to an end in November 2023.”

At the time of writing, no successor has been announced.