The government announced several measures in the Chancellor’s summer economic update to keep people in jobs, support people to find jobs, and support employers to create and protect jobs.
Support includes the furlough scheme, a new coronavirus job retention bonus, a new Kickstart scheme to support young people struggling to find jobs, additional and new incentives for taking on apprentices and trainees, and support measures intended to help employers create jobs.
The Coronavirus Job Retention Scheme aims to help businesses severely impacted by COVID-19 maintain their workforce by temporarily furloughing their employees.
Businesses furloughing their employees can claim a Government grant that covers up to 80% of each employee’s usual monthly wage cost up to £2,500 (plus the associated Employer National Insurance contributions and pension contributions at automatic enrolment employer contribution levels).
It is a temporary scheme, which the Government are currently advising will run until the 31st October 2020. From August, businesses with furloughed employees will be asked to make a mandatory contribution to the 80% salary costs paid by the government.
This will start with employers being required to pay National Insurance and pension contributions in August, followed by 10% salary contributions from September and 20% from October.
Employers can no longer furlough additional staff, however, they can now bring back to work employees who have previously been furloughed for part of the week (for any amount of time and any shift pattern), while still being able to claim the Coronavirus Job Retention Scheme grant for their normal hours not worked. When claiming the grant for furloughed hours employers will need to report and claim for a minimum period of a week.
The CJRS is available for businesses, recruitment agencies (agencies workers paid via PAYE, public authorities and charities of all sizes and sector who started a PAYE payroll scheme on or before 19th March 2020 and have a UK bank account. Employers are required to submit information to an HMRC portal. Employers must get their employees’ written consent that they accept being furloughed.
Please note that businesses can no longer furlough additional staff, however to bring furloughed employees back to work on a part-time basis, your business will need to have reached a written agreement with employees (or reached a collective agreement with a trade union) that confirms the furlough arrangement.
Businesses can submit their claims through an HMRC Portal (click here). Employers are able to backdate their claims to the 1st March.
Businesses will be required to submit key information including:
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 over £520 per month on average between the end of the Coronavirus Job Retention Scheme (31st October 2020) and the end of January 2021
Further detail about how businesses can access this money is expected shortly. Payments will be made to eligible businesses in February 2021.
The government has announced a new scheme, Kickstart, which is a £2 billion fund for the direct creation of jobs for young people aged 16-24 who are on Universal Credit, out of (active) work for six months or more and ‘work ready,’ but deemed to be at the highest risk of long-term unemployment.
The Treasury expects the scheme to benefit c.200,000 young people.
Funding will be available to businesses for each job, to cover 100% of the relevant National Minimum Wage for up to 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment pension contributions for 6 months. Employers can top this up if they want to. The Government is also offering employers £1,500 to set up support and training for those taking part.
To benefit from the scheme, jobs must be high quality, new additional jobs – rather than simply replace existing jobs – and if they don’t take them on longer-term at the end of the six months, employers must provide training and support to help the young person find a permanent job.
Click here for further information
The scheme is open to all sectors and types of businesses. If your organisation is planning to create 30 job placements (or more) then you can submit your application directly through the government website here.
If you are unable to offer this many job placements then you must partner with other organisations to reach the minimum of 30 job placements before making your application. In this scenario, your application must be submitted through a representative or intermediary acting on your behalf.
The Greater Birmingham Chambers of Commerce is interested in becoming a representative and working with our Chamber of Commerce members to coordinate and submit their applications. Please register your interest by emailing the Chamber on firstname.lastname@example.org
Businesses will access eligible young people for qualifying jobs through the Department for Work and Pensions. Employers will interview the applicants and decide which candidate is best suited to the job. It is important to note that you will only receive the funding if you appoint someone that has been referred to you through the scheme.
The first placements are anticipated to start in November 2020.
Apprenticeships are a means of formal vocational training, whereby an apprentice gains recognised qualifications and essential skills alongside working and earning a wage. Apprenticeships are available to anyone over the age of 16.
The Chancellor also announced that the Government will introduce a new payment of £2,000 to employers in England for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1st August 2020 to 31st January 2021.
These payments will be in addition to the existing £1,000 payment the Government already provides for new 16-18 year-old apprentices, and those aged under 25 with an Education, Health and Care Plan – where that applies.
To take on (additional) apprentices and benefit from this extra incentive, businesses are encouraged to speak to local training providers.
The additional payments will be made through the Digital Apprenticeship Service – which levy paying and non levy paying employers are now encouraged to sign up to.
A traineeship is a course aimed at 16-24 year olds with qualifications up to and including a Level 3 (A Level equivalent). It can last from 6 weeks to 6 months. Candidates will do a combination of study, normally English, Maths, a vocational subject and employability and work experience.
The work experience part of a traineeship is normally a minimum 100 hours. Traineeships are not jobs and employers are not required to pay trainees, however, they are encouraged to contribute to expenses associated with traineeships. Trainees can continue to receive work benefits, including JSA/UC.
The Government has set out its intent to provide an additional £111 million this year for traineeships to triple learner participation. It also plans to improve provision.
Potentially most crucially, the Government also plans to fund employers who provide trainees with work experience, at a rate of £1,000 per trainee.
This £1,000 per trainee grant is available for up to 10 trainees per employer. No confirmation is yet available on how this will be paid, but most likely it will be through the provider. Interested businesses are encouraged to speak to local training providers about benefitting from this scheme.
The government also announced a number of measures in the Chancellor’s summer economic update designed to help employers create new jobs. These are outlined in the Chamber’s briefing paper on the economic update, available here.
They include a temporary increase in the Nil Band of Residential Stamp Duty to stimulate the housing economy, social housing and public sector decarbonisation schemes, a Green Homes Grant to encourage homeowners and landlords to invest in making properties more energy efficient and a Green Jobs Challenge Fund for environmental charities and public authorities.
The GBCC welcomes the support the government has announced to support employers in maintaining and creating jobs during these difficult times, however is concerned that it will not go far enough to stem the increase we are already seeing in local (and national) unemployment as the furlough scheme winds down.
The Kickstarter scheme is very much welcomed. Rising youth unemployment is an area of particular concern across Greater Birmingham; youth unemployment has been relatively high in the West Midlands for a number of years and young people are currently leaving education and struggling to access an extremely tight jobs market.
However, this scheme needs to be shaped with direct input from the business community, and careful thought given to delivery in order to be genuinely effective and take lessons from the 2009 ‘Future Jobs Fund’ which it appears to have been modelled upon.
Support for apprenticeships and traineeships is also welcomed, though to date there has been a noticeable lack of support for graduates who will also be looking to enter an extremely challenging jobs market.
Traineeships have traditionally not been too popular with candidates, however, Government plans to improve provision, if these are able to ensure that traineeships are high quality, genuinely advantageous initial opportunities for young people, may aid in attracting the volume of learners the Chancellor is expecting.
The GBCC would support protecting jobs further through increasing the Employment Allowance for SMEs from £4,000 to £20,000 for an initial 18 month period and increasing the threshold for National Insurance contributions from £8,788 to £12,500.
Initiatives to create green jobs and fuel an environmentally sustainable recovery will benefit a number of individuals and businesses in the region, however, the GBCC would further like to see Government investing in environmental sustainability in the West Midlands by backing the West Midlands Combined Authority’s Recharge the West Midlands Investment Case to Government.
The Chambers would also like to see far wider economic stimulus and measures to fuel economic recovery and rebuild business confidence, which will be crucial to ensure that businesses are in a position to provide meaningful placements for learners and Kickstarters. These measures are outlined in the Chambers’ Unprecedented Times report.
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