Chancellor announces changes to Job Retention Scheme
By Rachel Lawler
Chancellor Rishi Sunak has confirmed changes to the Coronavirus Job Retention Scheme and Self-employment Income Support Scheme in today's daily briefing.
Coronavirus Job Retention Scheme
The Job Retention Scheme will continue to offer the current level of support until the end of June 2020.
From July onwards, employers will be able to bring employees back to work for any amount of time and any shift pattern. For example, an employee could return to work for two days a week and still be furloughed the other three.
The government will continue to pay up to 80% of employee wages, including national insurance and employer pensions contributions.
The current Job Retention Scheme will close to new entrants on 30 June. Employers will need to place new employees on the scheme before 10 June.
From August onwards, the scheme will continue to pay up to 80% of employee wages, but employers will be required to start paying national insurance and employer pension contributions.
From September onwards, the government will pay 70% of employee wages, with employers required to pay a further 10%.
From October onwards, the government will pay 60% of employee wages, with employers required to pay a further 20%.
After October, the Job Retention Scheme will close.
The early years sector 'must be adequately supported'
Neil Leitch, chief executive of the Alliance, said: “Today’s announcement by the government has important ramifications for the early years sector.
"While we of course recognise it is not realistic to expect the Job Retention Scheme to continue indefinitely, the childcare sector has faced a significant financial hit during the coronavirus outbreak. As such, while it is positive that the scheme will continue in some form until October, the fact remains that at a time when the government urgently needs to be offering greater financial support for childcare businesses, it is instead starting to place additional costs on them.
"We know that some providers will not be opening on 1 June and many of those that do will be doing so based on a phased reopening. With low demand for places expected, many providers will be operating on a reduced staff structure and will therefore require support through the furlough scheme.
"As such, while the increased flexibility set to be introduced is welcome, with staff costs accounting for the vast majority of provider outgoings, the financial burden set to be placed on employers from July onwards is likely to place a significant strain on already struggling settings, many of which will already be facing the costs associated with reopening, such as extra cleaning and PPE.
"It is therefore vital that the government looks to ensure that the early years is adequately supported through what was already set to be an incredibly challenging period for the sector. Failure to do so will leave many providers with no choice but to make redundancies, and in the worst cases, close their doors permanently."
Self-employment Income Support Scheme
Applications for a second, and final, grant for the self-employed will open in August. The grant will be paid out in a single instalment covering three months' worth of average monthly profits at 70%, up to a total of £6,750.
Neil added: "We warmly welcome the announcement that the Self-employment Income Support Scheme, which has provided much needed support to childminders, is to open again for a second time. That said, we know that there are many childminders who are relatively new to the sector who remain ineligible for support from the scheme.
"We urge the government to reconsider its stance on this issue and ensure that newly-employed childminders are able to benefit from the same level of support as the rest of the childminding sector."