A new way of working for the self-employed – SMart

With Philip Ross, Alex Bird and Lauren Crowley

In Britain, along with Brexit, we are seeing a change to our economy through a huge rise in the number of people working as self-employed. It is currently at around 4.8m, which is over 15% of the workforce and is set to outnumber those in the public sector by 2018.

The UK’s flexible labour market is not only hugely productive, contributing over £255bn to the economy every year; it is also one of our greatest competitive advantages. This is five times Britain’s Brexit bill. In people terms it is larger than the public sector, yet it tends to be disregarded by policy makers and the self-employed have little bargaining or political power.

The growth in self-employment isn’t restricted to the UK, but is happening across the world, across Europe and in North America. A fledgling freelancing movement is starting to emerge as workers across borders are joining together in solidarity and co-operation.

In 2016 Co-operatives UK published a report called ‘Not Alone – trade union and co‑operative solutions for the self-employed’. It recommended a partnership approach between unions, co-ops and mutuals. Partly as a result of this report, the British trade union Community has formed a partnership with the shared workspace co-operative, Indycube. Both have strong links in Wales and a strong focus on the growing self-employed workforce.

The Not Alone report also looked at other international models, including Broodfunds (Breadfunds) in the Netherlands and the Freelancing Isn’t Free Act promoted by the Freelancers’ Union in New York. The Breadfunds model helps workers with sick pay where there is no state help and the Freelancing Isn’t Free Act helps the self-employed get paid on time and have a proper contract.

It looked too at the SMart co-op model in Belgium, France and 8 other European countries. It looked within the wider context of ‘WorkerTech’ – as in what wider technology and business processes are needed to help empower the self-employed both individually and as a group.

So in December 2017, a delegation from the UK freelancing community visited SMart.be in Brussels. The delegation comprised of Philip Ross, a freelance business analyst and Co-ops UK Associate, Alex Bird, a co-operative researcher and entrepreneur, Mark Hooper, the founder of the IndyCube Co-op that provides shared workspaces across the UK, Lauren Crowley, the Head of Research and Policy at the Community Union and Harry Pitts an academic from the University of Bristol, specialising in industrial policy and the self-employed.

We saw first-hand not just the visible infrastructure that is their office and factory buildings near the centre of Brussels, that has grown out of a single building to include those surrounding it as well. But we felt too, the invisible architect of the place; the hum of people, the buzz of activity. We learnt that on a daily basis 18-25 people come to SMart in Brussels for a presentation to learn what the co-op is, how they can work through it, and how they can join. SMart doesn’t do much marketing, like any good business it is all word of mouth.

There are over 14,000 full voting members of the co-op in Belgium, as well as 11,000 others using their online business management system. 20% of these members are actively billing all the time and 80% come and go on contracts. But together they have a business turnover of over €120m in Belgium and €20m in France. They have operations in 7 other countries too.

We saw a place that offers not just business services to members, like invoicing and contract management. But a scheme that interfaces with the benefits system, as well as longer term support for their members’ careers as an independent. These were less like services offered to clients by a business and more like help offered to members of a trade union.

But it goes beyond this; through the model it empowers freelancers not just to work together or pass work between each other, but to be able to form project teams and take on larger pieces of work.

They can do this because they transform their self-employed workers into salaried workers.

The model is that freelancers work for SMart and are paid a salary like an employee. Their salary is restricted by the income they bring in, as the salary and expenses must come from the money they earn. Thus, they have to make their own work, setting their own timetables, chasing up contacts and negotiating with them. Taxes and National Insurance are taken care of centrally (like for employees), professional and accident insurance is provided, and clients are billed via SMart. Because SMart is a larger organisation it has the muscle to act against late and bad payers, Organisations that build up a history of being late or poor payers effectively find themselves blacklisted as too bad a credit risk, until they pay and then are welcomed back if appropriate.

We need to look at what part of the UK self-employed market, this would work in. But for my part we were very inspired by what we saw. Because we saw something that people didn’t just work with, but it was something too that people could believe in and control. That is the power of co-ops, unions and mutuals. SMart isn’t just a collection of individuals using a platform, but a co-op, a cohesive force that helps to create a sense of place and bargaining power for freelancers.

To help freelancers we need to empower them. SMart showed us a way of doing this. We believe that we need to empower them both commercially and socially, to help them to organise better for a fairer deal, so that with the coming changes in the economy, such as digitisation and automation, that a career as a freelancer will not be just as good as that of a permanent worker, but can be better.

We look forward to hosting a visit by SMart to the UK in February, to show them how trade unions and co-operatives are working together and to strengthening our ties.