This is the third chapter in a series of blogs around furlough. In chapter one we talked about this new buzzword: what does it mean? In chapter two we saw how this word had become part of our everyday vocabulary. Now we look at how the scheme is evolving alongside a local lockdown.
On 29 May the chancellor announced a flexible furlough approach.
From 1 July businesses were given the flexibility to bring furloughed employees back part time. Individual organisations decide the hours and shift patterns their employees will work on their return. This enables employers to adapt to the service need and demand whilst staying COVID-19 secure.
The employer will be responsible for paying their full wages for the hours they work. The employer will be able to claim under the Coronavirus Job Retention Scheme for employees’ wages for the normal hours that they do not work (i.e. hours they remain on furlough)
For the time when the employee is not working the funding available will remain the same, at 80% of employees’ wages up to a maximum of £2,500 per month, plus the employer national insurance contributions (NICs) and the minimum automatic enrolment employer pension contributions due on the subsidised wage.
Under the “flexible furlough” scheme, the minimum period for which an employer can claim will be one week. Any arrangement for the employee to return to work on a part-time basis must be agreed with the employee and confirmed in writing.
Local organisations that re-opened as part of the national easing of lockdown in June are now able to re-use the furlough scheme. However that might be a problem if you haven’t registered a new entrant by 30 June.
In the case of Wesley Hall Community Centre Ltd, a charitable company, the majority of staff were furloughed. Briefly, three staff came off furlough when they reopened the pre-school on 29 June. Only two children came to the nursery that day as parents got used to the opportunity of using nursery facilities again and by the evening the local lockdown was announced. The pre-school had to close again and those three staff were put on furlough again. If the organisation had wanted to put further staff on furlough at that stage they would have incurred issues.
Only employees that you have successfully claimed a previous grant for will be eligible for more grants under the scheme. This means they must have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March and 30 June 2020. For the minimum 3 consecutive week period to be completed by 30 June, the last day an employee could have started furlough for the first time was 10 June. This may differ if you have an employee returning from maternity, paternity, adoption, shared parental or parental bereavement leave or service as a military reservist. ACAS has a useful guide called Furlough and the Coronavirus Job Retention Scheme, explaining all of these scenarios.
In addition the government has some guidance which enables you to check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme, which reminds us 31 July is the last day that you can submit claims for periods ending on or before 30 June.
On 19 June the government announced that the COVID-19 alert level should move from Level 4 (A COVID-19 epidemic is in general circulation; transmission is high or rising exponentially) to Level 3 (A COVID-19 epidemic is in general circulation).
More people will then allowed to return to work that previously were unable to do so, and as part of this the government has introduced a tapering approach to the furlough scheme.
From 1 August 2020, the scheme will continue to cover 80% of employees’ wages (for the hours they do not work), up to a maximum of £2,500 per month, but the employer will be responsible for paying the employer NICs and employer pension contributions.
From 1 September 2020, the scheme will cover 70% of employees’ wages (for the hours they do not work), up to a maximum of £2,187.50. As a minimum, the employer must pay 10% of the employee’s wages, so the employee continues to receive 80% of their normal wages, up to the maximum of £2,500 (although employers may top this up further). The employer will be responsible for the employer NICs and pension contributions.
From 1 October 2020, the scheme will cover 60% of employees’ wages (for the hours they do not work), up to a maximum of £1,875. As a minimum, the employer must pay 20% of the employee’s wages, so the employee continues to receive 80% of their normal wages, up to the maximum of £2,500 (although employers may top this up further). The employer will be responsible for the employer NICs and pension contributions.
At the end of October the scheme will close.
These tapering timelines may be an issue for Leicester VCSE organisations who provide services within the postcode of the local lockdown, dependent on whether the local lockdown continues past the 18 July review date.
Commissioning and furlough
Previously we reported on the government’s procurement policy note (PPN) 02/20, which sets out information and guidance for public bodies on payment of their suppliers to ensure service continuity during and after Covid-19 until 30 June. Where commissioners had previously made continuity and retention payments for contracts that have interrupted; new guidance issued on 9 June in the form of a procurement policy note (PPN) 04/20 encourages commissioners to develop a transition plan with their supplier to be implemented as soon as possible and before the end of October 2020.
All this may impact on your ability to retain staff now and in the future.
Job Retention Bonus
That’s why the job retention bonus made provide further support to employers and employees.
On 8 July the government published their A Plan For Jobs 2020 policy paper. Within the paper, the depth of the furlough scheme is explained – helping employers pay the wages of 9 million employees across the UK.
Also the Job Retention Bonus was introduced, encouraging firms to keep on furloughed workers. The idea of the scheme is to prevent skills from fading and to maintain strong employment relationships. The bonus will reward and incentivise employers who keep on their furloughed employees.
The government will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021.
Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021.
Payments will be made from February 2021.
Flexible finance for the recovery
The furlough scheme has provided financial support to many organisations including the VCSE sector. However, there have been situations where some employees have been left out of the scheme and others gained. For example employers that don’t operate PAYE as part of their payroll were unable to use the scheme and while you are on furlough you could work for another employer if contractually allowed.
If the job retention bonus scheme isn’t a viable option for your organisation and you have to make some staff redundant as part of your road to recovery, then you may want to refer them to Citizens Advice’s preparing for after redundancy article, which covers topics such as the job centre’s rapid response service.
In 2017, a report by the British Council called Activist to Entrepreneur highlighted how well social enterprise addresses gender inequality and women’s empowerment in the UK. It quoted that when it comes to for-profit entrepreneurship in the UK, only one business in three is started by a woman. There are two male-led businesses started for every one female-led business. The gender gap in social entrepreneurship is much lower, with 42 per cent of social enterprises started by women in 2015/16.
The Fawcett Society’s Exiting Lockdown: The Impact on Women report advocates for the publishing of equality impact assessments for the Coronavirus Act 2020 or other key policies such as the Job Retention Schemes. They feel by conducting and publishing these assessments, it would reassure the public that the Government is making decisions which take into account the lives of all of our citizens.
On 20 May the government announced the unlocking of monies in dormant accounts to provide a further funding boost for charities and social enterprises across the country as part of its coronavirus response. Access, the foundation for social investment has received £30m of those dormant account monies to provide grant to blend into social investment vehicles to support the charities and social enterprises impacted by COVID-19.
At this stage they want to understand what are the barriers which are preventing the breadth of the charity and social enterprise sector from being able to access the finance they need? They would like to hear from anyone who feels they have particular plans, perspective, knowledge base or potential solutions that may help them design their programme well.
They are particularly interested in applications from BAME-led, Disability-led, LGBTQ+-led, and Women-led infrastructure and intermediary organisations. Initially, they are accepting responses to this call for ideas until the end of September 2020.
Hopefully this flexible finance will provide further support to the sector as the furlough scheme has and help to support the gender equality within the UK’s workforce.
If you would like to chat through anything about the furlough scheme or the Access flexible finance scheme, then please get in touch. If using the online form, please use support for your organisation drop down box in the reason for contact section.
Get support from VAL
If you are a charity, community group, or social enterprise and you need additional support to deliver services during the pandemic, VAL is here to help.
We can offer advice on issues that affect charities and social enterprises, from fundraising/ investment to proper governance and managing volunteers.
You get can in touch via:
0116 257 5050