PolicyLens

Methodology note

Replace zero-hours with guaranteed hours: calculation note

Scenario estimate showing gross costs, offsets and behavioural uncertainty; not an official costing.

View main policy page: Replace zero-hours with guaranteed hours

Central fiscal result

+GBP 0.8bn - Net public-finance impact in 2027-28

Low case: +GBP 0.2bn. High case: +GBP 3.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

  • Require guaranteed-hours contracts for regular variable-hours workers, with compensation for cancelled shifts.
  • Baseline is current law and published official data unless stated.
  • Private business costs are excluded unless they affect tax or procurement.
  • Target year is 2027-28, with later years shown separately.

Affected population

  • Unit is variable-hours workers and contracts.
  • ERA analysis cites about 2.4m affected workers.
  • Fiscal exposure is public and commissioned services.
  • Private business costs are wider than fiscal costs.

Gross impact

  • ERA analysis cites 2.4m variable-hours workers.
  • Official guaranteed-hours EANDCB is about GBP 0.22bn.
  • Official shift-notice/payment EANDCB is about GBP 0.20bn.
  • Central fiscal exposure scales public and commissioned-service costs.

Fiscal build-up, central case

  • Public and commissioned-service pass-through: +GBP 0.55bn
  • Administration and enforcement: +GBP 0.20bn
  • Tax and NI offsets: -GBP 0.05bn
  • Tribunal pressure: +GBP 0.10bn

Central net impact: +GBP 0.8bn in 2027-28.

Behaviour and pass-through

  • Low case assumes official ERA-style implementation.
  • Central assumes stronger compensation and public pass-through.
  • High case assumes broad regularity tests.
  • Employers reduce some marginal shifts.
  • No wellbeing saving is monetised.

Phasing

  • 2026-27: +GBP 0.2bn. Guidance and contracts.
  • 2027-28: +GBP 0.8bn. First full year.
  • 2028-29: +GBP 0.9bn. Avoidance disputes.
  • 2029-30: +GBP 1.0bn. Scheduling settles.

Main source groups

  • S1: S1 ERA analysis: 2.4m variable-hours workers affected.
  • S2: S2 ERA Table A10: guaranteed-hours cost about GBP 0.22bn EANDCB.
  • S3: S3 ERA Table A10: shift-notice/payment about GBP 0.20bn EANDCB.
  • S4: S4 Tribunal stats: enforcement caseload already high.
  • S5: S5 Autor/Kerr/Kugler: protections can reduce productivity.