Chancellor's Job Support scheme

epm-84

If your role is at risk, the Chancellor's announcement today might not be the hope you wanted.

If an employer has 3 full time people undertaking a role earning £2k a month each then they can keep one person on £2k and make two redundant.

Alternatively, they can use the government's scheme and share the role between 3 people, with each doing 1/3 of their usual hours.  That way each employee gets £666.67 for the hours they work, then the employer needs to pay a third of £1333.33 (£444.44), that means the cost of 1 FTE is £3333.33 instead of £2k. (Obviously there's employee's NI and pension contributions to consider as well.)

So unless businesses are expecting variable demand or demand to pick up in the next couple of months I can't see why they will use the scheme.

bradders1983

Its also no good for the likes of horse racing tracks, football stadiums, theatre,s arenas, music venues etc.... so there will still be lots of job losses in those sectors.

Grumpy_chap

For the business in EPM's example, it may be preferable to the costs of redundancy.  If they are a business that expects turnover to recover, having consideration of coronavirus impact in the wider sense.

[Deleted User]

Yeah the figures mentioned don’t always add up and many employers will know that. 

epm-84

Grumpy_chap said:

For the business in EPM's example, it may be preferable to the costs of redundancy.  If they are a business that expects turnover to recover, having consideration of coronavirus impact in the wider sense.

That depends on length of service and age.  If they are all 23 year old and started less than 2 years ago there may be no redundancy payment to consider.  If they are 50 year old senior managers who have been at the business for 20 years then it's a different matter but I hope they would be earning more than £2k a month.

Also making someone redundant and re-employing them next year means their continuous length of service is reduced.

epm-84

bradders1983 said:

Its also no good for the likes of horse racing tracks, football stadiums, theatre,s arenas, music venues etc.... so there will still be lots of job losses in those sectors.

Football stadiums will need some staff as matches are being played behind closed doors but obviously they don't need match day stewards or staff to sell or check tickets.

mrflib

It is extremely disappointing. I work in the wedding industry which has been disproportionally affected by government intervention, We have lost around 95% of our 2020  customers but we still have an absolutely solid  order book for 2021 and 2022 (record bookings, in fact). We were really hoping for some industry-targeted support that would allow us to just... get to 2021 to take that money with our trained and brilliant staff in tow.
We watched the announcement, the directors crunched the numbers and heads just dropped.
We're now making 14 good people redundant as the scheme is worthless to us.

Thrugelmir

lbradders1983 said:

Its also no good for the likes of horse racing tracks, football stadiums, theatre,s arenas, music venues etc.... so there will still be lots of job losses in those sectors.

There's going to be job losses across all sectors. Be little that's untouched. 

hunnie

The chancellor mentioned extending the grant for the self employed.  Was this just for small businesses that have employees or for sole traders also do you think?

Jeremy535897

Sole traders also (and partnerships).

Tammykitty

This is crazy - the scheme should be spilt into different sectors now:

1)Those operating as normal or who actually have increased businesses
2)Those operating to some degree of normality - this scheme works well for these
3) Industries which are open with serious restrictions/drop in incomes
Domestic Trades and any business that involves going into peoples homes
Pubs 
Taxi
4)Those which are still not allowed to operate to any proper degree:
Wedding & Events
Entertainment
Nightclubs


Obviously, the affected industries would need to be looked at, and a robust list drawn up