Banking clients slash IT contractor rates by 10-15% in cost-cutting drive
Some of the UK’s biggest consumers of financial IT contractors have cut IT contractor rates by 10-15% across the board. According to a Reuters report by Sarah White, Lloyds has cut rates by 10-15% and the Royal Bank of Scotland (RBS) cut rates by 10%. Japan’s biggest investment bank Nomura, which has a major presence in London, cut its IT contractor rates by 10% in September. The measures are part of wider cost-cutting drives by the big banks. Many bank employees are suffering similar cuts. More…
IT contractor prospects dampened by further declines in financial sector hiring
On top of the rate cut news, financial IT contractors learned that hiring across the UK’s financial sector has fallen again, with 6% fewer new financial sector roles in September compared to August. According to September’s Morgan McKinley London Employment Monitor, the number of new roles in September is a new low for 2011, and represents a decline of 19% when compared to September 2010. Morgan McKinley Financial Services COO Andrew Evans blames the Eurozone crisis for cautious hiring by the banks. He is hopeful that: “…finding a solution to the debt crisis in Greece and other Euro zone countries will go some way to providing a clearer picture.” More…
Financial services IT suppliers see 10% increase in annual sales
In contrast to the rate pressures experienced by financial IT contractors in the UK’s financial sector, the top 100 firms selling software and services into the global finance sector have seen sales increase by 10% in the last year. This is according to Computer Weekly’s Karl Flinders, who also reports that five UK suppliers are in the top 100. However, Flinders warns that UK and US IT firms are losing out to Indian suppliers better able to offer banks offshore capabilities, which could be a further blow to the UK’s financial IT contracting sector. More…
Contractors pitching for secure government face clearance Catch 22: PCG report
Contractors pitching for government assignments that require security vetting are being blocked from roles in favour of security cleared contractors. A report from the University of Buckingham Centre for Security and Intelligence Studies and PCG has “highlighted a serious market failure around the process of recruiting workers for security cleared government roles.” PCG Managing Director John Brazier highlights the Catch 22 in which many contractors find themselves: “…some of the UK’s most qualified contractors…cannot get a post without clearance or get clearance without a post!” More…
HMRC admits Goldman Sachs tax interest error cost taxpayers £8m, but hounds contractors for £220k over IR35
HMRC’s permanent secretary Dave Hartnett has admitted to the Public Accounts Committee that a calculation error led to Goldman Sachs escaping an £8m unpaid tax interest bill. And despite calls for Hartnett’s resignation, Accountancy Age’s Jaime Kaffash reports that the HMRC boss is the only one of HMRC’s four commissioners with actual tax experience, so is unlikely to go. This case highlights HMRC’s inconsistency in applying tax legislation, doing a deal with a major corporate at the same time as hounding contractors for £219,180 during the 2010/11 financial year, as revealed by a recent FOI request. More…
Chancellor’s oil and gas ‘windfall tax’ continues to hit North Sea contractors
Oil and gas contractors have lost out on new contracts due to the ‘windfall tax’ imposed by the Treasury in the 2011 Budget. According to a report by trade body Oil & Gas UK, the new 81% top rate of tax on oil and gas production resulted in a quarter of projects in “technically challenging, small or remote fields” being cut overnight. Oil & Gas UK Chief Executive Malcolm Webb believes the tax has damaged the sector’s prospects: “A heavy tax rate…and greater uncertainty over future tax treatment, has not helped the industry’s case in proving attractive to international investors.” More…
New North Sea investments by BP will secure jobs and contracts
Despite the impact of the ‘windfall tax’ on North Sea oil and gas revenues, a stream of new contracts for oil and gas contractors are likely to arise from energy giant BP’s decision to invest £10bn over the next five years. Following UK government approval, BP and partners Shell, ConocoPhilips and Chevron, plan to develop the Clair Field west of Shetland and invest in existing production capacity, creating 3,000 jobs and contracts. The long-term prospects for contractors are good, as BP Group Chief Executive Bob Dudley explains: “We are working on projects that will take production from some of our largest fields out towards 2050.” More…
‘Stagnation’ in the UK’s domestic economy may create contract opportunities
UK contractors may benefit in the short term from the current ‘stagnation’ in the domestic economy as firms take on temp staff rather than permanent employees. The latest British Chambers of Commerce (BCC) Quarter 3 Quarterly Economic Survey (QES) shows a weakening picture in the domestic market, exports, business confidence, cashflow and investment in plant and machinery. Hiring has slowed, but contractors present a short term and low risk solution to firms’ talent resourcing needs. Despite the gloomy outlook, some key indicators remain positive, as BCC Director General John Longworth explains: “Many of the balances are in positive territory, but they are not as strong as we'd like to see.” More…
Self-employment tops 4m as unemployment reaches 17-year high
Self-employment in the UK topped 4m at the end of August, against a backdrop of deteriorating labour market conditions and unemployment reaching a 17-year high. The latest labour market statistics from the Office of National Statistics (ONS) reveal that 21,000 more workers chose self-employment, including freelancing and contracting, in the quarter to August, reaching a total 4,018,000. Unemployment rose by 114,000 between June and August to reach 2.57m. The full-time self-employed account for nearly a quarter of all those working for themselves, at 2,930,000. More…
Marketing and media contractors benefit from short-term marketing budget increases
Contractors and freelancers working in the marketing and media sectors will benefit from short-term increases in market budgets during the third quarter of 2011. However, the Institute of Practitioners in Advertising (IPA) Bellwether Report - 2011 Q3 paints a gloomier picture over the longer term, with confidence at a ten-quarter low. The increased spend is not homogenous and ‘traditional media’ are missing out, as Markit Chief Economist and Bellwether report author Chris Williamson explains: “Extra money is being targeted at online advertising, direct marketing and sales promotions, but there remains a worrying reluctance to increase spend on traditional main media activities.” More…