The compliance bar for public-sector delivery has never been higher.
From IR35 enforcement to framework rules, there’s increasing scrutiny on how programmes are resourced and delivered. For SME consultancies and delivery partners, this makes it essential to get the fundamentals right from day one.
At SR2 Consulting, we advise public-sector organisations and SMEs to ensure their projects are delivered on time, on budget, and fully compliant – helping avoid delays and support long-term success.
This guide outlines what you need to know, what to avoid, and how we can help.
Navigating IR35 in 2025
IR35 remains a key compliance consideration – particularly for central government projects – despite the 2021 off-payroll working reforms now being well embedded.
What hasn’t changed is the need for a robust assessment process and a clear audit trail. What has changed is the level of scrutiny. Organisations are now expected to actively manage IR35 compliance, not just tick the box.
One of the most common pitfalls we see is the use of blanket IR35 determinations – where all contractors are automatically classified as inside or outside IR35, regardless of role or working practices.
While this might seem like the safest option, it can quickly backfire. Contractors with strong in-demand skills are far more selective about the terms under which they work, and blanket ‘inside’ calls can reduce the calibre of talent willing to engage. In some cases, it can even delay onboarding and disrupt delivery timelines.
At SR2 Consulting, we work with public-sector clients and delivery partners to take a more rigorous and practical approach. That includes:
- Drafting Statements of Work correctly – ensuring they reflect genuine project-based engagements and stand up to scrutiny
- Aligning effectively with the delivery team – so working practices match what’s written on paper
- Using insurance-backed IR35 tools – giving clients confidence in each status determination, along with protection in the event of a challenge.
Taking the time to get IR35 right doesn’t only mitigate risk and avoid penalties. It sets your programme up for success – with the right people, on the right terms, from day one.
What’s Changing with IR35 in 2026
A key development on the horizon: from 6 April 2026, both off-payroll working (IR35) and Companies Act thresholds will shift, affecting who must determine IR35 status.
Under the current rules, only medium and large companies are required to assess IR35 status for off-payroll workers. But the financial thresholds defining “medium” will rise significantly:
- Annual turnover will increase from £10.2m to £15m
- Balance sheet total from £5.1m to £7.5m
While these new thresholds apply from April 2025 for company accounts, they won’t affect IR35 compliance until April 2026. This means some consultancies currently caught by the off-payroll rules will no longer have responsibility for status determinations from 2026 onwards.
Effectively, up to 14,000 organisations currently classed as medium‑sized under IR35 will be reclassified as small and exempt from IR35 obligations.
SR2 are well-positioned to support clients through these changes – with a proven track record of helping delivery partners navigate IR35 reforms without compromising on speed, quality, or compliance.
Building a Compliant, Agile Workforce
The speed at which public-sector programmes move means mobilisation can’t and shouldn’t be delayed by compliance gaps. But speed should never come at the expense of being thorough with compliance requirements.
We help clients build and maintain a virtual bench of security-cleared, pre-vetted professionals who are ready to deploy – often within days.
Where projects require SC or DV clearance, we also advise on clearance validity and lead times. For example, the Home Office doesn’t recognise 10-year clearances – only those renewed or re-validated within the last 7 years, which can catch consultancies off guard. Getting this right early avoids unnecessary delays and protects your delivery window.
Final Tips & Takeaways
Public-sector delivery success is reliant on getting the fundamentals right. If you’re bidding for, winning, or delivering on government contracts, here are three things to prioritise:
- Get IR35 status right – early, accurate determinations save future headaches.
- Prepare for rapid onboarding – having a smooth, compliant onboarding process in place is critical.
- Align to framework requirements – including social value commitments.
Thinking about delivery before you’ve nailed compliance is a false economy. The earlier you address these areas, the more smoothly your consultancy can scale.
Need support?
Speak to SR2 Consulting about resourcing solutions that are fast, secure, and framework-ready.
Whether you’re an SME scaling up or a government department needing delivery assurance, we’re here to help.
