By Richard Sagar, Policy Manager, Charity Finance Group.
On 29 May, at the daily press briefing, the Chancellor announced that the government’s five tests for easing lockdown measures had been met and set out how the government thinks we can now take careful but deliberate steps to reopen our economy.
As part of this, the Chancellor announced some changes to the Coronavirus Job Retention Scheme, which we know from our surveys, is the most used of the government’s support measures by civil society organisations. We’ve summarised the main changes in this table:
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Date
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Employer costs
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Flexible Furlough
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The final date by which an employer can furlough an employee for the first time will be the 10 June, in order for the current three-week furlough period to be completed by 30 June. Employers will have until 31st July to make any claims in respect of the period to 30 June
Until August
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80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions.
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1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. Employers will be able to agree any working arrangements with previously furloughed employees.
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August
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The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions
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September
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The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500
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October
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The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
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Further guidance on flexible furlough is due to be published on 12 June. So, there may be other issues to consider once we have further details, which we will update you on in a further blog.
The full government guidance on furlough can be found here
What does CFG think this means for charities?
Though the announcement recognises a more gradual taper of government contributions, particularly around flexible furlough, there will continue to be a substantial gap for organisations that will still be closed and/or have significantly reduced income due to social distancing requirements while the CJRS tapers off and eventually come to end. Even if government guidelines are relaxed, individuals may decide to act more cautiously and the duty of care for staff and beneficiaries’ remains in the hands of trustees.
Charities most likely to be affected include those with retail operations, museums, those who operate leisure facilities, theatres and those who rely on mass participation fundraising events.
We will ask government to consider additional targeted financial support that can be offered to help mitigate these affected charities and their beneficiaries.