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Journeys to Formalisation London’s Employment and Skills Convention CESI presentation 23rd May 2011 www.community-links.org Community Links & the informal economy • East London charity – 35 years • Supporting 30,000 local people every year • 10 years + focus on informal work and poverty – Evidence base: 25 reports + – Policy development: HMRC Hidden Economy Group – Campaigns: ‘Need NOT Greed’ www.community-links.org About cash-in-hand work Definition • Economic activity hidden from the state for tax, benefit or employment law purposes, but legal in all other respects. Facts & Figures • 12.3% / ₤120bn of UK’s GDP • Over 2 million workers • Av. 20% in deprived borough’s www.community-links.org Why formalise? • Individual – – – – grow business make it viable and profitable employ people remove fear of looking over shoulder • Employment provider – – – – – self employment is another ‘work option’ client already working therefore committed few barriers (vs. long term unemployed) better paid ‘differential payment’ groups job sustainability - 80% still trading after 2 years • Government – reduced benefit payments – increased tax take – increased legal compliance www.community-links.org Key components to formalise • Individual – ready to formalise / legitimise – have tested business products and skills needed to run a business – ready to grow business • Support organisation – already provide business support (have experience and skills) – trusted in the local community – knowledge of local community and services • Government – – – – acknowledge informal work behind the scenes: don’t provide frontline service (not trusted) ready to try carrot and stick approaches amnesty: “only look forward” principle www.community-links.org Mechanics of formalising • • • • • Skilled advisers Address wider issues e.g. housing, benefits Need to gain trust with clients – it takes time Don’t be explicit about the service – business as usual Will only formalise if shown benefits of doing so – make more money, can advertise, employ more staff • Each client is unique – needs assessment + plan + small steps • Apply the “only look forward” principle www.community-links.org Contact Details Aaron Barbour Head of linksUK Community Links 105 Barking Road, London E16 4HQ 020 7473 9666 (direct line) [email protected] www.community-links.org www.community-links.org