Is that because of dictat from above that there are to be no contractors?
From what I've seen so far, most companies in the UK are taking advantage of the new IR35 squeeze to also lower the daily rates. I've been a contractor since 1998 and I'm not biting.
Why? 1) There is plenty of remote work - in Europe and 2) if you have 2 passports (such as myself) - there is plenty of work in the U.S. as well. 3) UK companies can always hire contractors through an agency that's a foreign company if they want to retain talent.