The Government’s cornerstone coronavirus support policy moves into it’s second phase of unwinding from today. The Government announced that from August 1st the Job Retention Scheme would begin winding down in three phases, and will come to an end on Halloween. It has been the central pillar of the support the Government has offered during this pandemic, and although they have been urged by many to continue the scheme, as they have in other countries in Europe, there is no sign that the scheme will be extended beyond the end of October.
It’s estimated that as of now there are around 10m people still on furlough, despite most sectors being partially open or fully open. This is causing concern among some economists as various reports are now out there which predict around 3m of those jobs will go once the JRS ends. This will put already untold pressure on the economy as it seeks to evolve and adapt to a new world.
That aside, this is what you need to know and what changes from today.
From today the Government will fund 70% of an employee’s wage, dropping from 80%, with a new cap of £2187.50 per month. The original cap stood at £2500. It means that if employers wanted to keep their staff on the £2500 per month bracket, they would have to contribute £312.50 per month. They will also have to pay National Insurance and pension contributions on top of this. This was part of the first phase of the winding down that was introduced on August 1st.
The JRS is the most expensive of the various schemes that were brought into place to support the economy as the UK went into lockdown. Its thought to have cost tens of billions of pounds and the Government is now looking at ways in which this would be paid for in the years to come. There will be a heated debate in the coming weeks as to whether now is the time to even have that conversation, and what methods would be best to be able to pay back that debt.
From October 1st phase three will kick in, which will see the Government contribution to the JRS drop to 60%. If an employer wants to keep staff at the £2500 bracket they will have to contribute £625 per month. Companies will continue to have to pay NI and pension contributions.
Its during these remaining phases where its expected that the number of job losses may start to rise as companies weigh up whether to retain staff or begin to lay them off as their own costs begin to rise again.
Apprenticeships and upskilling
It seems inevitable that millions more are going to lose their jobs in the next few months. As daunting as that seems to those who find themselves still on furlough, including many in fenestration, that doesn’t mean there are no routes to a new and potentially better future.
For the young, there are new traineeship and apprenticeship schemes being launched by the Government. There is funding available for businesses taking on trainees and apprentices which means that there is very little outlay to companies taking on young people under these schemes. I have long been an advocate for this route of employment. Our industry has struggled for years with a talent pool which only seems to get smaller. If now isn’t the time to build for the future then I don’t know when is.
We also need to start looking more at upskilling the existing workforce. Before COVID technology and the internet was changing the economic landscape. The pandemic has merely accelerated that timeframe. But we were unprepared for the pace of change that has been undertaken by our sector and all sectors in order to continue to function during lockdown. Many of those changes are likely to remain and the new economy looks very different to what it used to. Technology and automation play a much larger role, even in fenestration. For those who are losing their jobs, there needs to be a focus on upskilling and retraining to help those looking for a new career adapt to a new economy.
As we near the last quarter of the year the road ahead, as we are now being frequently warned by various bodies, is looking “bumpy”. What employment and the economy look like will continue to change and adapt at a rapid pace over the next few months and we have to be prepared to embrace whatever change comes if we’re to ride out the bumps in the road.
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