The CIPD has written to the Chancellor, Rishi Sunak, calling for the extension of the Coronavirus Job Retention Scheme (CJRS) – also known as the furlough scheme.
After a change of plans in October, the Coronavirus Job Retention Scheme was extended until March 2021 with the Chancellor stating that this would “protect millions of jobs and give businesses the certainty they need over what will be a difficult winter”.
However, Peter Cheese, CIPD Chief Executive, has now written to the Chancellor to ask for the extension of the furlough scheme until June amongst other recommendations.
Extending the scheme, Mr. Cheese said, would help businesses plan and continue to protect jobs against a “very uncertain backdrop” through the first half of the year.
Additionally, Chancellor Rishi Sunak stated in November that the furlough scheme was subject to change. Whilst the Government would pay 80 per cent of the wages over the winter months, this policy would be reviewed in January to decide “whether economic circumstances are improving enough to ask employers to contribute more”.
CIPD’s second recommendation suggests that the level of wage subsidy should remain at 80 per cent for February and March given that the vaccine roll-out will still be in its infancy and the circumstances surrounding COVID-19 will be uncertain.
However, the CIPD do then state that the level of wage subsidy should decrease in April to 70 per cent and then remain at 60 per cent for May and June 2021.
It acknowledges that the Government will be worried about the cost of extending the CJRS but states it should consider the “cost of not doing so”. It predicts the number of people claiming Universal Credit will rise and there will be a reduced confidence and spending power in the economy.
The final recommendation made by the CIPD is linked the learning and development. It states that the next step of the CJRS should go further than protecting jobs but should also create support to enable firms to train staff who are fully furloughed or working reduced hours. It should also provide funded outplacement skills development to any workers who have been made redundant.
In the letter to the Chancellor, Mr. Cheese elaborates on this by saying that companies could be permitted to use their Apprenticeship Levy funding for other forms of accredited training, as well as apprenticeships.
In addition, to support smaller non-levy paying firms, the CIPD encourages the creation of the CJRS training fund of up to £100 million. It states that this would be funded from levy paying firms’ expired levy funds that would otherwise go to HM Treasury. The CIPD estimates that this would pay for the training or outplacement skills development support for around 160,000 workers in small firms.
It also states that the Scottish and Welsh Governments could also allocate additional revenue to support training for firms using the CJRS during 2021 to ensure that the training support via the scheme is UK-wide.
The CIPD states that all these changes implemented will ensure that business confidence is boosted and it will mitigate the various uncertainties they will face including the end of Brexit transition and COVID-19.
Monica Sharma is an English Literature graduate from the University of Warwick. As Editor for HRreview, her particular interests in HR include issues concerning diversity, employment law and wellbeing in the workplace. Alongside this, she has written for student publications in both England and Canada. Monica has also presented her academic work concerning the relationship between legal systems, sexual harassment and racism at a university conference at the University of Western Ontario, Canada.