Yesterday’s* announcement by Chancellor Rishi Sunak has bought about some innovative solutions to help the UK economy to recover after the COVID19 crisis, with creating jobs and protecting jobs as central themes for this recovery strategy. This blog is a roundup of the schemes available to support businesses and our views on how this will impact recruiters.
Benefits for companies who can bring staff back from Furlough
It couldn’t last forever, but the first stage of the Government’s recovery plan (the Coronavirus Job Retention Scheme or Furlough), had to end at some point. Today, Mr Sunak said that it was in nobody’s interests to keep the scheme going indefinitely. For any business who successfully brings an employee back from Furlough in to a ‘valid’ job and if you employ them continually until January 31st, you will qualify for a £1,000 bonus. There are some conditions about the salary that the employee will need to earn in order to qualify, so look at official sources.
There are currently 9 million people on Furlough, so this is a £9 billion scheme if everyone on Furlough is successfully bought back into employment.
Support for young people
The Chancellor announced the Kick Start scheme which will support the 700,000 people leaving education this summer. If employers provide a job for a young person, the Kick Start scheme will cover the cost of this salary. It must be a role of over 25 hours per week and must pay at least national minimum wage. If employers meet these conditions, the government will fund that young person’s wages for 6 months, up to a total of £6,500.
The scheme will be open for applications next month, will be available for large and small businesses and there is no cap on the number of places available. This is a £2bn fund which will fund hundreds of thousands of jobs for a generation who may end up losing out on opportunities if there aren’t jobs available for them as they leave education.
The government also revealed plans to incentivise businesses to take on apprentices, with £2,000 available per apprentice under 25 and £1,500 available per apprentice over 25.
Chairman of the REC, Neil Carberry, live tweeted throughout the Chancellor’s Summer Statement to support this scheme, expressing his concern that young people are always vulnerable during a recession.
Supporting people to find work
The government’s plans will include an increased number of career advisors, which will support a further 250,000 people and increase the funding for job centres, so that they can help more people back in to work and off universal credits.
Supporting the hospitality and tourism industry
The Chancellor acknowledged that the hospitality and tourism sector was one of the hardest hit during the peak of the pandemic. He is hoping that the public will start to become more confident when eating out in pubs, cafes and restaurants again. As a sector, they employ over 1.8 million people (with over 1.4 million on Furlough) so hopefully the 5% VAT on food, drinks and attractions (starting on Wednesday 15th July until 12th January 2020) will go some way to get people to support British tourism again. This initiative is supported by the innovative “Eat out to help out” scheme where everyone in the UK can receive 50% from a meal every Monday – Wednesday. The government will top up the remaining 50%.
What else was announced to boost the economy?
Central to the government’s plan is a desire to invest in roads, schools, hospitals and high streets. Their focus is to create green jobs and they will set up a scheme to help make homes more energy efficient. The scheme will cover up to 2/3 of a £5,000 investment in green technology for your home and 100% of a £10,000 investment for any low-income households. The view is that this scheme will create 140,000 green jobs.
The strapline for this initiative is Save Money. Cut Carbon. Create Jobs.
Getting the property market moving
Property transactions fell in May, so the government has commited to helping people feel confident in buying, selling and renovating their houses. The stamp duty cut will be effective immediately and means houses sold for under £500,000 will qualify for 0% stamp duty, available until 31st March 2021, saving the average householder £4,000.
This is a simple overview from the Chancellor’s summer announcement (Wednesday 8 July*). Please speak to a professional if you require advice about the benefits of these schemes for your business and always apply for any schemes via an official Government portal or website.
If you need some support with payroll issues relating to Contractors, please get in touch with your Client Service Associate.