Hot topic: Pandemic interventions for employers from the UK government
Beau Jackson, July 29, 2020
In early July, Rishi Sunak announced his plan for jobs which will provide financial support to the under-25s, one of the hardest-hit demographics of the pandemic.
In the so-called 'mini-budget,' the chancellor also announced financial incentives for employers to both retain staff and create new jobs in a bid to boost the UK's economic recovery
For some industries, the schemes have been a welcome helping hand in unprecedented circumstances.
However, critics are concerned that the plan overlooks other groups in need of critical support, with the incentives seen as a 'drop in the ocean' when addressing the substantial challenges of returning employees from furlough.
Lizzie Crowley, skills adviser at the CIPD, says:
"The chancellor’s Summer Statement included a raft of measures designed to stave off unemployment, particularly among young people, who are likely to be hardest hit by the recession.However, there are concerns already that some of the proposals will miss the mark.
"Most of the doubt is centred on the Job Retention Bonus and whether it will provide enough incentive for employers to bring workers back from furlough beyond those they’d planned to.
"A lot of money is being ploughed into the Kickstart Scheme, aimed solely at young people, but the government will need private companies to get behind it. Similar schemes have fallen short in the past because low-paid jobs in the public and third sectors have been the only ones on the table.
"We were pleased to see efforts to incentivise more employers to invest in apprenticeships being stepped up. However, we’d have liked this to be targeted at SMEs, where take up has been historically low, and for young people to be the main recipients.
"We believe the most effective step the government can take to protect jobs – which was missing from the Summer Statement – would be to extend the Job Retention Scheme in the hardest-hit sectors, like hospitality and leisure beyond October."
Becky Neale, owner and director of Stonechat HR Consulting, says:
"The introduction of the VAT reduction and Eat Out to Help Out scheme for the hospitality sector was a stroke of genius. In a sector so badly hit by COVID-19 and desperately in need of a lifeline, this initiative really could help them return to profitable trading and save jobs.
"They are operating at reduced capacity and increased overheads in order to comply with social distancing, so incentivising people to eat out during the quietest part of the week will encourage people to return and see for themselves the work the hospitality sector have undertaken in order to open safely and serve their customers.
"The £1,000 bonus for employers is an interesting one, the idea is good, but the reality is the cost to employ outweighs the incentive to retain employees. For large corporations it is a fantastic new revenue stream however, just look at Primark which has announced it will not be claiming what would be worth c£30 million based on number of furloughed employees.
"Businesses need to think and remember there is a duty to wear the corporate responsibility hat and behave appropriately before making claims if they don't need the money to save jobs."
Check back tomorrow for part two of this hot topic
This piece appears in the July/August 2020 print issue. Subscribe today to have all our latest articles delivered right to your desk