This article was updated March 27, to include changes, information, and FAQs that arised from the official government guidance on the scheme published here.
By now, you’ve probably heard about the government’s Job Retention Scheme, an initiative to prevent mass lay-offs and a promise to cover 80% of wages for staff that employers would otherwise have to let go.
Along with the announcement that the government will continue to pay out funded entitlements for 2, 3, and 4-year-olds, it increasingly looks like that the government is positioning itself to really support you through these difficult times.
But the scheme, announced on the 20th March, has still generated plenty of confusion around how exactly it will apply to early years providers.
That’s why I called up Early Years Alliance CEO Neil Leitch, to discuss what we know about the scheme, what we’re still waiting to hear, and to pass along some of your questions on what the scheme will mean for you.
Note: I spoke with Neil before the further guidance published on the 26th March.
What do we know about the Job Retention Scheme already?
“For the first time in our history, the government is going to step in and pay people’s wages.”
That was the promise of Chancellor Rishi Sunak as he announced the measures to the nation. But what exactly do we know so far?
Well, according to the official government guidance on the scheme, and the chancellor’s announcement:
- You will be able to claim back 80% of a staff member’s wage, up to £2,500 a month, if you would otherwise have to lay them off due to the pandemic.
- To do so, you will have to designate them as a furloughed worker, notifying them of this change in writing and keeping a record of that.
- Staff cannot do any work for an employer while furloughed, defined as offering services or generating revenue. More on this in the FAQs below.
- Furloughed staff must have been on your PAYE payroll on or by 28th February 2020.
- Staff made redundant since that date can be rehired and furloughed under the scheme.
- The minimum time a staff member can be furloughed for is 3 weeks, which is also the length of time you must leave between making claims with HMRC.
- This will be done through an as-of-yet unreleased HMRC portal.
- The Job Retention Scheme will cover the cost of wages backdated to March 1st, and will be open for at least three months, with an extension possible.
- The first grants are expected to be paid within weeks, with the scheme fully up and running by the end of April.
“Coupled with the cover for 2-, 3-, and 4-year-old funding,” Neil Leitch explained to me, “sustainability hinges without a doubt for providers on this programme.”
With that in mind, it’s clear that this scheme is a call for employers like yourselves to stand behind your workers, and trust that the government will support you. Peter Cheese, the chief executive of CIPD, the trade body for HR professionals, has urged companies to “Hold their nerve while funds arrive”.
However, Neil did point out to me that this scheme means the government support available for childminders and smaller settings is still unclear. On 27th March, the government did, however, reveal a grant scheme for the self-employed to cover profits up to £2,500.
Why is the scheme so vital for early years providers?
It’s becoming increasingly clear that most early years providers can’t continue to employ all of their staff full-time during the part closures. That’s why government support is crucial to prevent parents from having to foot the bill.
“It varies in our nurseries,” Neil explains, “where some places have hardly any children and some have more. But it’s pretty obvious that we can’t continue to keep all of the services open and all of the people employed.”
What’s more, we already know the early years has massive recruitment issues and is, sadly, often undervalued. We can’t afford for staff to leave the sector during these months away. That’s why it’s more vital than ever that you can keep your staff employed, engaged, and ready to begin again once we return to some version of normality.
What are we still waiting to hear about?
The main concerns for early years providers right now rest on two questions: Who exactly qualifies, and what are the terms of the furloughed absence?
“If we are expected to be flexible in our response to supporting key workers and essential services,” Neil says, “then surely this particular initiative has to give us the capacity to be able to do that.”
That’s why there have been calls for early years providers to be able to un-furlough individual practitioners to keep up with changes in demand, without it changing the conditions of the scheme and what they can claim. That’s exactly why Neil explained to me that the Early Years Alliance are lobbying government to administer the scheme with some flexibility, and you can join their efforts by messaging your MP with their template letter.
“If the whole intention of the scheme is to provide job security for people but also support key and essential workers,” Neil points out, “then it seems hideous that we would be locked down into the rigour of procedure and terms and conditions.”
So as we hear more announcements about the scheme over the coming days, expect more clarity around the rotation of staff and the conditions of the furlough.
What are the unanswered questions?
We’ll try to bring you the answers to these unanswered questions and more in the coming days:
- Can you rotate furloughed staff?
- Now answered below
Can you bring people back into work and then re-furlough as things change?
- Now answered below
Does the scheme apply to long-term bank staff?
- Now answered below
How long do staff have to have been with you?
Your questions on the Job Retention Scheme answered
We’ve been collecting questions on the scheme from our customers and online. Here, we’ve tried to answer some of the most important.
Did we miss something? If you have other confusions or unanswered questions about the scheme, please email me at firstname.lastname@example.org, and I will do my best to offer some clarity and answer your questions.
Learn more about Famly
Find out below from Neil Leitch about the impact of Famly at the Early Years Alliance, and see what we can do for you in a personal demo.