The Service Providers Association (SPA) has refuted claims that there is a lack of regulation of the umbrella services industry.

Earlier this week, Adrian Marlowe, managing director of Lawspeed and chair of recruitment trade body, the Association of Recruitment Consultancies (ARC), claimed the umbrella industry is not regulated, with few checks and balances in place. 

But the SPA says its code of conduct, launched last November, is designed to address several regulatory issues, including those relating specifically to HM Revenue & Customs payments and has already caused some members to leave the association because they are unable to comply.

The SPA adds that under the code, members undergo an independent review by one of the ‘big four’ accountancy practices, with the review documentation being voluntarily submitted to the HMRC - an act of open-book accounting and independent assessment that demonstrates their commitment to principled and transparent business practices.

SPA chairman, Stuart Davis says: “It is wrong to claim there is a complete lack of checks and balances in place. Accepting the need for greater regulation, the SPA worked with a wide variety of industry stakeholders along with the HMRC to devise an independently audited regulatory framework – encouraging best practice and transparency across the sector. The code is a perfect example of how effective self-regulation can work and allows people to have full confidence when using our members’ services.

“Our industry is no more immune to the economic downturn and the problems it creates than any other, but the strict standards and legal guidelines included in our code of conduct provides reputable service providers with the opportunity to demonstrate their commitment to professional, ethical operating practices. We look forward to continue working with all relevant parties to ensure the right procedures are in place.”