A Budget for Pandemic Recovery
The Chancellor of the Exchequer has just given his first budget statement since we went into lockdown #1 last Spring and included the pre-announced confirmation that the coronavirus job retention scheme (furlough scheme) would continue for some time yet.
The scheme itself will now run until the end of September 2021, having been due to expire at the end of April 2021. According to reports for the period ending 31 January 2021, the scheme has protected around 11.2 million jobs since it was opened in March 2020 with 4.7 million staff currently furloughed. By extending the scheme now, the Government may have had in mind that they have needed to have given sufficient notice to many employers who may have been required to consult staff representatives for up to 45 days before making mass redundancies at the end of April 2021.
The scheme will continue in its current form until the end of June 2021, with the earliest date for the release of all lockdown restrictions in England being 21 June 2021. Thereafter, employers will have to start contributing more than just NI and pension contributions, starting at 10% pay for unworked hours in July 2021 and then 20% for August and September 2021, with the Government’s grant dropping to 70% and then 60% respectively.
In January 2021, HMRC had updated its guidance on the furlough scheme to confirm that employers may furlough those who are clinically extremely vulnerable or have caring responsibilities resulting from COVID-19 (including home-schooling during lockdown and caring for vulnerable individual in their household). HMRC and Acas have further updated their respective guidance to reflect the budget announcement.
The Government hopes to have first dose vaccinated all adults over the age of 50 by 15 April 2021 and all remaining adults by 31 July 2021 (according to its vaccines delivery plan). Hopefully, the vast majority of all adults will therefore have received their second dose by the time the extended furlough scheme is now due to expire.
The Chancellor also confirmed in his budget statement that the National Living Wage will rise to £8.91 from 6 April 2021. Separately, it has been announced that there will be contemporaneous increases to (amongst other things) the limit on a week’s pay for statutory redundancy pay purposes to £544 and the cap on unfair dismissal compensatory awards to £89,493.
Please contact the team at Synchrony Law if you require assistance with any aspect of the furlough scheme or the effect of COVID-19 on the workplace.