It was not so much a matter of if, but when the changes to IR35 in the Public Sector (introduced in April 2016) would be felt by those Government bodies undertaking major projects and who previously engaged contractors by the droves, due to the flexibility and specialist skills they could provide.
The Infrastructure and Projects Authority (IPA), whose responsibility is to improve the way in which major government projects are delivered, are tasked by the Treasury with producing an annual report to demonstrate how effectively such projects are performing, and progress is measured by a ‘Delivery Confidence Assessment’ (DCA).
The latest report published in July, rather tellingly cites one of the most common causes of failure being a lack of resources, which when considering the latest changes to IR35 comes as no surprise. Information and Communication Technology (ICT), one of the major categories under the IPA’s jurisdiction, currently has 39 projects in progress worth £18.6b, some of whom are for departments such as the MOJ and MOD, and of those 39 projects, 9 are not on track for successful delivery with urgent action required to address the problems.
Although the report paints a picture of improvement in comparison to previous years, it will be interesting to see what the next annual report looks like, when the consequences of IR35 reform in the public sector will be felt more fully.