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Unveiling the Hidden Economy: Journeys to Formalisation Welfare to Work Convention 2011

A comprehensive guide to transitioning from informal to formal work, highlighting key benefits, challenges, and strategies for individuals and organizations. Learn how policy changes and support services can empower workers and boost local economies.

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Unveiling the Hidden Economy: Journeys to Formalisation Welfare to Work Convention 2011

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  1. Journeys to Formalisation Welfare to Work Convention 2011 www.community-links.org

  2. 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

  3. 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

  4. Who are we talking about? • Employees • Employers • Self employed • Many local organisations working to support people: Skills & expertise, experience, passion, solutions www.community-links.org

  5. What’s the problem? We are under-estimating our local economy. • Latent potential: unrecognised work • Targets are often not met • Investment may misdirected • Services are not responsive enough to actual local needs • People are moving out of absolute poverty but may be trapped in relative poverty www.community-links.org

  6. What changes have happened so far? • Complexity and restrictions in the welfare system that resulted in people working informally will be removed in Universal Credit • Employment support services have become increasingly tailored to address personal barriers to the formal labour market. • HMRC has taken a balanced approach of the carrot and the stick www.community-links.org

  7. What else needs to happen? • Universal Credit must work for people wanting to become formally self employed. • A formalised self employed person should be considered an outcome on the Work Programme. • Front line services like Jobcentre Plus should consider a ‘two ponged’ approach to customers they suspect of doing undeclared work. • Community outreach support should consider informal workers. www.community-links.org

  8. The benefits of formalising a business • For the individual • business growth • For the employment provider • Harnessing entrepreneurialism; improving lives • For Government • Cost savings, increased compliance www.community-links.org

  9. The ‘How To’ • For the individual • ready to formalise / legitimise • Support organisation • Experienced and trusted • Government • Develop a strategy to ‘formalise’ people www.community-links.org

  10. Mechanics of formalising • Professional skills • Holistic support • Trust • be implicit • Actively sell the benefits of formalising • Tailor support to a person’s own needs • Apply the “only look forward” principle www.community-links.org

  11. Contact Details Maeve McGoldrick Community Links 105 Barking Road, London E16 4HQ 020 7473 9644(direct line) maeve.mcgoldrick@community-links.org www.community-links.org www.community-links.org

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