Lamb warns that, under the legislation, as well as the right to annual leave and bonus schemes, agency staff will also have the right to take up to 26 weeks maternity leave without breaking their 12 weeks ’continuous service’ record. Lamb adds that employers that flout with the rules or who move staff around in very different roles every 11 weeks to avoid triggering their employees’ continuous service rights could face tribunal claims and fines.

Lamb explains: “Although the new rules don’t come into force until October 2011, employers will need to think about how they will budget for these new requirements now, and how they are going to place agency staff within their business in the future, to ensure they can still maintain a flexible workforce without breaking the rules.

“Obviously it is important that employees receive fair treatment within the workplace, whatever their employment status. However, the cost implications of these new rights could be quite significant for manufacturers in our region, in particular. Employers often rely on the flexibility offered by agency staff. They will be keeping a very close eye on their costs as we move out of recession and into recovery.”

But Ann Swain, chief executive of the Association of Professional Staffing Companies (APSCo), says recruiters could be left footing the bill for such costs.

“End users will be able to push the cost of complying onto recruiters by getting recruiters to indemnify them in respect of any claims made in connection with the Regulations. This will leave ‘vulnerable’ workers no better off and heap further costs on recruiters.

“The Regulations will give temporary workers who are pregnant or new mothers more rights than equivalent permanent employees. This will impose significant costs on staffing companies.”

Final regulations for the UK implementation of the EU Agency Workers Directive (AWD), which confirmed delayed implementation until October 2011, were laid before Parliament yesterday.

Kevin Green, chief executive at the Recruitment and Employment Confederation, says: “Professional recruiters will bear the brunt of making these complex regulations work on the ground and we are pleased that some of the recruitment industry’s key concerns have been taken on board.

“In particular, we welcome the delayed implementation date and the decision not to impose potentially damaging restrictions on the fees charged by agencies where a temporary worker is taken on permanently by an employer.

“However, there are real concerns that these EU regulations are ill-adapted to the UK labour market and could limit job opportunities at a time when flexible working options are providing a crucial route into employment. The priority now is to ensure that effective guidance is developed for employers and recruitment agencies.”

David Yeandle, manufacturers organisation EEF head of employment policy, says: “Manufacturers will be pleased the government has confirmed that this legislation will come into force in October 2011 and that it has resisted pressure for its earlier implementation.

“However, we remain concerned about the costs and administrative burdens that this new legislation will impose on employers and, in particular, about the decision to include some bonus payments in the definition of pay that will be used for equal treatment.

“It will now be important for the government to publish clear and practical guidance for employers on these regulations well before their implementation in October 2011.”

Source: The Recruiter

PCG

As we flip the calendar onto a new decade we inevitably start to reflect on the past, set goals for the future and ponder on what fate has in store for us.  Sadly, the one thing clearly evident is that we face a very uncertain future.  Despite signs that the economy is picking up with the stock market, retail and manufacturing all indicating positively (we may even officially be out of the recession) it is clear that unemployment and inflation will continue to rise and this will have repercussions on how we emerge, whether we see a double dip and ultimately how strongly we will develop as an economy.

Uncertainty abounds in our political future too, will Gordon Brown survive today’s challenge to his leadership?  Regardless of the outcome of this challenge, all signs point to a government change in the spring and indeed, even if Labour return to power we are looking at a much changed political environment.  Whatever the flavour of future government they will need to be observant, fleeter of foot, more creative and prepared to effect real and often fundamental change.

In this environment PCG is renewing its call for a fresh approach to freelancing, emphasising the vital role freelancing has to play in assisting growth.  Government and policy framers have failed to recognise the value of the UK’s 1.4 million freelancers despite overwhelming evidence that freelance businesses are the bedrock of the economy, bringing essential flexibility and skills.

In Quarter 4 2009 PCG launched its Fairness, Clarity, Recognition: Manifesto for Freelancing.  Copies have been sent to all MPs and Prospective Parliamentary Candidates as well as stakeholders.  We will be emphasising these points hard in the run up to the election.

PCG is leading the way by calling for a fairer tax and regulatory regime.  We need a pro-business climate fostered in the UK, a real commitment from policy framers to think small first, not just say it.  Fair regulation means regulation that is clear, accessible and not unduly burdensome.

Fairness means allowing freelancers easier access to the market for their services.  The Government needs to ensure regulatory barriers, burdens and costs to tendering are reduced, so freelancers can truly compete with larger businesses.

Heavy handed and senseless laws weigh business down like a ball and chain.  This is even more so with nano-businesses.  Every hour spent complying with red tape is an hour not spent productively.  We need to free up Britain’s talents to create wealth, not stifle them with top down bureaucracy.

Elsewhere, PCG is asking that in future all Government departments will have to ensure that 10% of their procurement budgets will go to nano-businesses and that Government departments and their contractors must not discriminate against freelancers who do not have pre-existing security clearance when it chooses which freelancers to award a contract to.

Looking at short term opportunity and long term competitiveness issues, Intra Company Transfers (ICTs) to flaunt immigration laws could have a very profound long-term effect as well as limiting the current opportunities for our freelance contractors and consultants.  Government must be vigilant to such problems and prepared to stand up to large companies who are breaking the rules.

It is PCG’s fundamental belief and echoed by most leading business commentators that flexibility in the labour market is the key to ensuring Britain’s future economic success.  The next Government must encourage freelancing as a flexible, innovative and entrepreneurial way of working that enables business to perform more cost-effectively, especially when recovering from recession.

The start of a new decade provides an opportunity for fresh, innovative thinking.  We will be continuing to push this message up to the election and beyond.

This article is courtesy of www.pcg.org.uk

Jenrick CPI has reason to believe that part of the government strategy to revive it’s coffers for 2010 will be to re-visit IR35. HMRC will be keen to find a route to maximise return to the Treasury in light of the announcement by the government of major cuts in public expenciture.

This was backed up by a recent interview with a tax inspector…….

IR35 is likely to be high on HMRC’s agenda this autumn as, following a lull of 18 months, limited company contractors will once more be in the firing line, warns former HMRC manager and IR35 expert Kate Cottrell of Bauer & Cottrell.

“HMRC has its sights firmly set on limited company contractors,” she says. “The latest set of questions on contractor tax paperwork provides it with a target-rich environment, which it will no doubt exploit.

“Many are at risk,” she warns. “My fear for contractors is that the last 18 months of low levels of HMRC activity on IR35 have been the calm before the storm, and that we will see limited company contractors increasingly under the spotlight as the Treasury seeks to raise taxes.

Cottrell also seeks to dampen the expectations of contractors assuming that a potential change of government will see the end of IR35: “Because of the huge sums of tax raised indirectly as a result of IR35, for example by umbrella companies and limited company contractors inside IR35 making their deemed payments, IR35 is likely to be here to stay.”

IR35’s contribution to the exchequer

“The results of the Freedom of Information Act request by the Professional Contractors Group (PCG), which seemed to indicate a pitiful tax take from IR35, are misleading,” says Cottrell. “For example, HMRC did not have systems in place to identify where tax revenues came from for much of IR35’s existence.

“However, it is clear that, if not for IR35, many umbrella companies would not exist,” she continues. “That’s important to remember in the ‘scrap IR35’ debate, because compliant umbrella companies are highly efficient tax gatherers on behalf of the Treasury.” Despite this, however, the Treasury has targeted the umbrella sector and challenged players in the market to be rigorously compliant.

Contractors unprepared for IR35 onslaught?

Cottrell, who used to manage a team of inspectors in her former life with HMRC, fears that many limited company contractors know too little about IR35, are unprepared for an IR35 inspection and could find themselves on the receiving end of a nasty tax bill.

“Many contractors assume that a substitution clause puts them firmly outside IR35, but this is most certainly not the case,” continues Cottrell. “The biggest factor, particularly since the Dragonfly IR35 ruling, which did contractors no favours, is control.”

She says that HMRC will be looking at the ‘what’, ‘where’, ‘when’ and ‘how’ of every contract: Post Dragonfly, the emphasis is on the ‘what’ – whether a client controls the contractor and can say, or simply has the right to say, ‘stop doing that and now go and do this’, and whether they are monitored and checked.”

She says: “Contractors can ensure that an investigation is quick and painless by getting their contracts checked and asking their client for a confirmation of arrangements. Plus, it is essential to have expert representation who can deal with HMRC on a contractor’s behalf.”

“Contractors can ensure that an investigation is quick and painless by getting their contracts checked and asking their client for a confirmation of arrangements” Kate Cottrell, Bauer & Cottrell

Employer Compliance Reviews

“In the event of an investigation, it is sensible to expect an inspector to be looking into your IR35 status as this is where the potential yield lies,” says Cottrell. “When that happens, limited company contractors are likely to receive notice of an Employer Compliance Review (ECR), which is the most common route for IR35 cases to start. The letter is not random and HMRC has specifically targeted the contractor because of something being flagged in their tax records by HMRC’s risk and research teams.”

HMRC will ask to see a representative of the company, usually the contractor, and try to arrange a meeting. Since April 2009, HMRC has wide ranging new powers for inspections and information requests which extend to the right to make unannounced visits to business premises.

Typically when investigating IR35 they will bombard the contractor with hundreds of questions about what they do and precisely how they work. The end-user client will also be questioned.

“Contractors are making a mistake if they attempt to field HMRC questions by themselves,” says Cottrell: “They are frequently unprepared and don’t understand the significance of the questions asked or the answers given. Contractors should always request questions in writing or at the very least a detailed written agenda prior to any meeting.”

IR35 status no longer a grey area

After ten years of IR35, managing the risks of the legislation is not as hard as it once was. The grey areas are often the result of the lack of knowledge of all parties in the contractual chain from the end client to the contractors themselves. “Not only are there contractors who don’t understand IR35,” Cottrell comments, “but there are also contractors who don’t even know about IR35!”

She says that there also remains a legacy of the former managed services companies (MSCs) some of which did not take IR35 seriously. Many advised their contractor clients that they were working outside of IR35, and many contractors still rely on this opinion several years later. Cottrell says that some people are now many contracts further down the line, but are still working through the same provider, albeit rebadged as an accountancy services provider.

But all contractors working through their own limited companies should be prepared. “HMRC has told us how much they are spending on compliance work, and we are seeing real evidence of joined-up government in initiatives, such as the Agency Workers Directive and proposed Construction Industry Scheme. Contractors who do not take action to clearly establish their status and make provision could find themselves in receipt of a very unwelcome visit from an inspector.”

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Article Source - Contractorcalculator.co.uk

Jenrick CPI – Leading IT Recruitment Consultancy

Latest Jobs – IT contract and permanent jobs

Published on Thursday, September 17, 2009

Umbrella company contractors could be in line for further flak from the taxman if they find themselves in the ‘crossfire’ between their umbrellas and the taxman. Contractors are even being encouraged to ‘shop’ their umbrella companies over things like being too free and easy with their expenses dispensations.

HMRC has just released a briefing – Revenue & Customs Brief 50/09 – in which it unambiguously announces its intention to step up investigations of what it perceives as abuses of expenses and dispensation rules by umbrella companies.

According to Kate Cottrell, of contractor legal specialists Bauer and Cottrell, it is no accident that this briefing comes hard on the heels of HM Treasury’s recently launched consultation into ‘false employment’ in the construction industry.

“If the new rules over construction employment come into force, umbrella companies are the logical destination for labour-only subcontractors,” explains Cottrell. “There is no talk about employment tests – government has just changed the rules.”

Spending HMRC’s compliance budget

“HMRC is flexing its hefty £1 billion compliance budget with these threatened umbrella company investigations,” continues Cottrell. “And providing a hotline for workers to shop their agencies or umbrellas for non-compliant activity is a new move on the part of the Revenue.”

The Revenue & Customs Brief 50/09 follows compliance activities already underway, and highlights those areas of most concern to HMRC, including:

• Potentially ineffective overarching employment contracts
• Dispensations that are invalid, or which have been wrongly applied
• Not complying with the terms of the dispensation
• “Expense payments” made tax-free without that level of expense, or in many cases any expense, having been incurred
• Potential illegal deductions from contractors’ pay
• Ineffective and sometimes unlawful management processes; and
• Breaches of the national minimum wage.

Evidence of ‘joined-up’ government is apparent, as HMRC says it is working with a number of government departments and authorities to “identify businesses acting in contravention of legislation”. HMRC also states its intention to “penalise breaches of the law as they are identified”.
Contractor flight from umbrella to limited

Despite the loss of umbrella company contractors’ travel and subsistence benefits being on the cards, Cottrell does not see a mass migration of construction and umbrella company contractors choosing to work through their own limited companies.

This is an area of expertise for Cottrell, whose firm specialises in assessing contractors’ suitability and IR35 status to make the move from umbrella companies to starting contractor limited companies.

“IR35 and deemed payments is still the dominant and driving legislative force in the contractor space,” she says. “In addition to IR35, low earnings also prove to be a significant barrier to incorporation.”

And, as she explains, HMRC has become more aggressive in its stance on expenses and ensuring certain categories of workers do not have a tax advantage: “If a contractor is working through an agency, they cannot claim any travel or subsistence expenses. In HMRC’s eyes, there is a fine line between being an umbrella company and becoming an employment business.”

Educating end users

End-user clients who employ agency workers and umbrella company contractors have been targeted by HMRC with advice on how to conduct due diligence on their labour providers.

Claiming this is to reduce fraud and the incidence of unpaid taxes, HMRC has issued a related advisory leaflet. Titled Use of Labour Providers, this urges end-user clients to carry out appropriate checks on labour suppliers and warns that, “Failure to carry out appropriate checks may be evidence that you knew or should have known of the fraud.” The leaflet then leaves things vague, with a catch-all disclaimer that says, “HMRC is unable to tell you exactly what checks you should undertake.”

Cottrell’s view is that this is the last warning to non-compliant umbrella companies from HMRC before it starts to spend a significant chunk of its £1 billion compliance budget targeting non-compliance. The outcome, she feels, will be the recommendation that non-compliant umbrella companies will lose their expenses dispensations, but could result that all umbrella companies will lose them.

“The false employment in construction consultation shows just how far the government is prepared to go to impose its will on the labour market,” Cottrell says.“After the construction sector, umbrella company contractors appear to be firmly in the government’s sights as the next target.”

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Issuing the ruling, the Court of Appeal said the communications between the parties did not contain either enough details, such as fees, or the elements necessary to form a contract.

Its judgement overturns an earlier ruling from Plymouth Crown Court, which said the provider’s emailed estimate to offer 200 units constituted a contract to provide that volume.

The University of Plymouth, which regularly provided beds to sleep external students on language courses, even told the European Language Center that the quote was not definitive.

“There will certainly be less beds available than this year, so we are advising you that there will only be 200 beds available…As ever with these things, this is not set in stone”.

None of the staff at the ELC, including Managing Director Helge Maule, replied to the message, sent May 24, 2005, nor did they respond to a subsequent email about availability.

Yet when a third email from the university offered only 100 beds, Mr Maule sued, claiming that ELC had a contract with the institution for 200 beds, based on the email to him in May.

Lord Justice Moore-Bick disagreed, saying all that the email spelt out was “equally consistent with two parties discussing business with a view to entering into a contract at a later date.”

He added that Mr Maule’s failure to respond to it “tends to suggest that he did not regard it as an offer to enter into a binding contract for accommodation” in the disputed period.

“Moreover,” the judge said, “I can see no basis upon which… [to] properly find that Mr Maule, or for that matter anyone else on behalf of ELC, purported to accept any such offer.”

Contract experts say this was problematic for Mr Maule, who was unable to cite exactly when and how the ‘contract’ was made, as offers must be unequivocal and then accepted.

Alongside an offer, and acceptance of that offer, the two other elements necessary to form a contract – consideration and intention to create legal relations – were also ruled as absent.

“It is the lack of clarity in the terms that meant the emails and phone calls did not establish a contract,” Ben Evans, a partner at legal firm Lawdit, reflected yesterday.

“It is well established that contracts can be formed via email and over the phone, however all of the normal contract rules must apply.”

Other than the four elements, these rules are also known as the three properties that all contracts must contain, said Roger Sinclair, a legal consultant at Egos.

They are ‘consensus’ – a point when the parties clearly agree on all the material terms, ‘consideration’ – each party contributes to the deal, and ‘mutual intent’ to be legally bound.

But in this case “the to-ing and fro-ing” shows there was no single point of time at which there was clear consensus, Mr Sinclair said, and “therefore no agreed basis on which the parties had agreed to be legally bound.”

To reduce the risk of ‘accidentally’ appearing to have entered a contract by relatively informal written communications, he said IT contractors could head them ‘subject to formal contract.’

Mr Evans also advised: “For IT contractors, and really for any business contracting via email or telephone, it is important to remember that should any dispute arise that you would need to be able to prove what was agreed.

“Obviously ‘best-practice’ would be to have a signed contract every time but this is simply not practical or commercially viable.

“If, for example, you agree a deal on the phone, simply confirm the points via email - it will take a matter of minutes but will give you written evidence of what was agreed.”

According to the judgement, any agreement between the parties was not in evidence – an absence which was made more noticeable by the pair’s detailed, written agreements in the past, ever year from 2001 to 2005.

Lord Justice Moore-Bick said: “Whatever may have been the case in previous years, in the absence of any clear evidence that the parties had agreed on terms with the intention of creating legal relations the evidence is not sufficient, in my view, to establish that a contract came into existence between them at that time.”

He added: “The impression one gets is that the parties were even at the late stage still negotiating with a view to reaching a final agreement on terms.

“Viewed in that context, and in the context of the wider course of dealing between the parties, the e-mail of 24 May 2005 does not look like a binding offer on the part of the university to make facilities available in 2006.”

For Lawdit, the judgement reads as a reaffirmation of “some old principles” of contracting, including the terms being as clear as possible, all the key points – price, payment, delivery time – being present, and the safety net of “confirming everything” in writing.

“There’s no new points of law here,” Mr Sinclair agreed, “just a reminder of the necessity for those [three properties] to be present before a contract is formed.

“Emails and phone calls can be sufficient to evidence a contract - whether on fact they do, or not, depends on all the facts of the case.”

Aug 5, 2009

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Article Source: Contractor UK

They said the employment booster to the nation’s “IP-rich” IT sector was vital for the economy, given the decline of manufacturing and the “shock” to financial services.To ensure the quarter of a million new IT jobs emerge, at the earliest by 2017, political, business and academic captains were told to sign the Technology Manifesto.

Created by software firm Micro Focus, and already backed by more than 30 influential figures, the manifesto states five directives for using the IT sector to stimulate the economy.

The directives include the introduction of radical changes to tax incentives for companies and individuals who want to invest in growing technology businesses in the UK.

Specific “fiscal incentives” for UK-based IT companies should accompany the reform, the manifesto says, to accelerate the UK’s output of world-leading R&D.

And the “good will” of successful IT entrepreneurs overseas should be called upon, by inviting them to mentor IT start-ups in the UK which show high-growth potential.

“The over-riding goal of the manifesto is to increase UK technology jobs by 250,000,” said the document’s signatories, who include BT Global Services, Carphone Warehouse, Virgin Media, Oracle, Tata Consultancy UK, Kingfisher IT and INSEAD.

This job-creation process should “significantly raise the contribution by home-grown technology businesses to GDP over the next ten years, thus providing a real roadmap for recovery by creating sustainable jobs, businesses and wealth,” the companies said.

Stephen Kelly, Micro Focus chief executive, spoke of the economy being currently “saddled with debt, decline, depleted industry and deteriorating employment,” but said its IP-rich industries had the capability to “make Britain great again.”
Jul 23, 2009

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Article Source: Contractor UK

According to a report in Contracting Matters, disputes between umbrella-contractors and their clients and agencies have risen four-fold on last year’s figures. And Rob Crossland, Managing Director of professional business services provider Parasol, says the effects are wide ranging.

He says: “In these difficult conditions, it is far more prevalent that an end-client would terminate a contract early, and this of course can have a huge knock-on effect.”

There are different courses of action suggested, depending on whether the contractor involved works through their own limited company or as an employee of an umbrella company.

Umbrella company support

Terminations involving umbrella company contractors can be complex, because the supply chain is multifaceted. The contractor is an employee of the umbrella company, which has a contract with an agency, which in turn has a contract with the end-user client.

So, Crossland says that, when in dispute with a client over termination fees and notice periods, contractors should talk to their umbrella company. Parasol has a dedicated out-reach Human Resources (HR) department to deal with these issues.

If a contractor faces early termination, they need to act quickly, but also in the right way. “If the relationships between the parties are not clear, or not understood, then there is a tendency for contractors to raise a challenge against anyone that will listen; but they should pause for breath and ensure they’re dealing with the right party,” warns Crosland.

To forestall rash contractor action, Crossland urges umbrella company contractors in any dispute over termination or timesheets to treat the HR function at their umbrella company as the first port of call, before entering into any discussions with their client or agency.

“It can be very disheartening if an early termination happens. Many of the agency contracts with an umbrella company have no notice periods stated, so it can be a no win situation,” he says.

“Make sure you keep your brolly in the loop and work with them for resolution. Remember that, as an employee of an umbrella, you do have rights. Equally, if you are deemed to be responsible for breaking a contract, then don’t be surprised if your employer starts to question your motives.” 

If the relationships between the parties are not clear, or not understood, then there is a tendency for contractors to raise a challenge against anyone that will listen; but they should pause for breath and ensure they’re dealing with the right party - Rob Crossland, Parasol

Limited company contractors – to sue or not to sue?

Limited company contractors don’t have the luxury of an HR department on tap, and their dispute with the agency or client is far more likely to be contract law-based than employment law related.

For genuine limited company contractors who rely on business-to-business contracts for protection, the ability to take action in the face of early termination will depend on the exact wording of the contract. Often, whether the termination is unfair will be a judgement call, and premature legal action could shut down any future stream of contracts.

A blatant contract breach by a client or agency, for example giving no notice where the contract says 30 days notice is required, could leave the contractor with some room for negotiation. In such cases, a month’s fees could be worth the legal expense and hassle to chase, but another option is to negotiate and perhaps suggest to the client that they split the difference.

Employment rights for some contractors?

There is an interesting development for some contractors who have worked long-term for the same client, have been working within IR35, and find themselves facing early termination. Following the recent Tilson v Alstom ruling, it appears that some of these contractors could be entitled to employment rights, which might include a claim for unfair dismissal.

But whatever your situation, understanding your contract is crucial. Crossland says: “Times remain challenging and the inevitable early terminations can and do happen to some contractors. It need not be the end of the world and there are some good businesses out there that can help you through it.

He also recommends thinking about the medium and long term before taking action: “It’s a tough one when it feels one sided, but remember that agencies and clients that you feel have done you wrong today might also be the ones to supply tomorrow’s project after the dust has settled.”

Published on Friday, July 10, 2009

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Article Source: Contractor Calculator

Parliamentary question on IR35

Labour MP Terry Rooney asked the following question in the Commons on 15th June 2009:

“To ask the Chancellor of the Exchequer how many investigations concerning IR35 were launched in each of the last five years; and how many of them resulted in (a) prosecution, (b) an increase in tax due and (c) no further action.”

To which Kitty Ussher (Treasury) replied:

“The intermediaries legislation, commonly known as ‘IR35′, was introduced with effect from 6 April 2000 to counter the avoidance of employed levels of tax and national insurance by individuals providing their services through intermediaries.

“Disclosure of HM Revenue and Customs’ compliance data relating to the legislation would result in a risk of non- compliance with the legislation. Accordingly I am not able to provide the data requested.”

This reply suggests to us that the Government figures are likely to show that the IR35 rules are rarely enforced in practice, and to admit as such might lead to more people not bothering to comply with the legislation at all.

“Unprecedented” refusal to answer

The Professional Contractors Group, which recently revealed that IR35 contributes a pitiful £1.5m to the Treasury each year, suggests that it is “unprecedented for a Minister of the Crown to refuse to answer a Parliamentary question because that answer would result in a risk of non-compliance with the legislation”.

Freedom of Information

The contractors’ organisation has lodged a further Freedom of Information request with HMRC, asking exactly the same question as Mr Rooney.

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Article Source: Contractoreye

Heading off the prospect of extra costs for large and small government suppliers alike, policy makers said contractors would remain outside the scope of the 2005 legislation.

They explained that forcing compliance on private sector companies would also hike costs for the state, as the suppliers would pass on the bill for having to answer requests.

In their consultation on extending freedom of information rules, officials added that the burden of contractors needing to be ‘FoI-compliant’ might put them off public sector roles altogether.

Moreover, the information that contractors would be asked to provide might already be available via the public authority,

“with whom the duty to provide services rests.”

The Ministry of Justice added:

“The government has concluded that no general expansion of FoI in relation to contractors is appropriate at the present time.”

Some of the consultation respondents, which included the Information Commissioner, Intellect and NO2ID, said providing details on contractors and their performance should remain the government’s job.

The CBI, the employers’ organisation, agreed, but because of the cost issue, rather than to stop government departments ‘wriggling out of their data-retention duties.‘

“Companies would find it extremely difficult to factor in FoI requests as a fixed cost when contracting with government and could set a price per request instead,” the group said.

“This would mean contracts may engender significant additional costs where companies receive a substantial number of FoI requests.”

In addition, details requested about a particular contract could be sought from both the contractor and the public authority, leading to a “proliferation of costs” and “potential litigation.”

Whether or not freedom of information rules should apply to contractors performing a public service will therefore be kept under review, the MoJ said, citing the CBI’s concerns.

In the meantime, all government contractors will be encouraged to comply with the spirit of the legislation, such as by volunteering information when requested.

However, consultation respondents argued that private sector firms contracted on ‘transformational government’ projects should be more than just expected to comply.

They said that such private sector outfits, alongside those on big state IT programmes like e-borders and ID cards, should be brought within the scope of the freedom of information rules.

Overall, though, only a minority of respondents called for government contractors who provide services of a public nature, or supply public authority services, to open up to the rules.

Contractors providing services to care homes, detention centres and prisons would be kept under the closest watch, the MoJ said, for often working on behalf of public authorities.

Other bodies will now be brought within the FoI act, including the Association of Chief Police Officers, UCAS and the Financial Ombudsman Service.

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Article Source: ContractorUK