The Government’s assessment of the costs of the Make Work Pay reforms is now significantly more than the £1.1bn estimate announced at the beginning of 2026, with figures for the zero hours reforms alone ranging from £350mn to £2.9bn per year, depending on which threshold of hours is adopted.
These figures were included in the long outstanding impact assessments of the costs and benefits of the zero-hour reforms, and compensation for short notice and cancellation of shifts. These were published alongside the first piece of Government commissioned research, on workers’ experiences of insecure work.
Tania Bowers, Global Public Policy Director of APSCo UK and OutSource says:
These assessments and the accompanying research are shockingly late: The Employment Rights Act is already law, the extremely wide-ranging consultation on options for the zero hours reforms have only a few weeks left to run, the Government’s view on how to proceed is firming up and the implementation date remains only a year away. There is also no corresponding research on business.
It is not simply the tardiness that is shocking but the sheer range of potential financial impact on British business – from millions to many billions per year with £350 million to £2.9 billion per year estimated. The Government is deriving these figures largely from how many workers are in scope of the compensation provisions for late notice and shift cancellations. However, what is a costed unknown is the response employers may make to the restrictions on using agency workers and additional costs.
We continue to call for agency workers to be excluded from these reforms and in particular skilled contractors. If they are left in scope, then a much more detailed analysis of business practices, rationale and workflows are needed in the key sectors identified by Government as engaging insecure workers. This must be done before any further steps are taken towards implementation.
Employer costs are already very high with employers large and small across all sectors switching to technological alternatives to people, and offshoring, as a result of the NICs increase last year. It will be incredibly complex and expensive for even the biggest employers to implement the reforms let alone SMEs who employ the bulk of the British workforce. There is a grave risk of workers and British growth bearing the brunt of these reforms through less opportunity, less jobs and flattened growth. Exactly the opposite of what the Government hopes to achieve over the next three years.