CIPD: ‘Extend furlough to June’

Peter Cheese, chief executive of the CIPD

The CIPD has called upon the government to extend the Coronavirus Job Retention Scheme (CJRS) to 30 June 2021 saying it’s crucial that ministers set out a long-term plan to protect jobs beyond March.

Peter Cheese, CIPD chief executive, has written to the Chancellor following consultation with HR leaders who have been on the frontline of workplace decision-making during the Covid-19 pandemic.

He has called for a joint package of job protection and training support to provide business stability and support individuals over the next six months of continued economic uncertainty

The CIPD is calling for:

  • Government to extend the scheme beyond 31 March to the end of June to help businesses plan and to continue to protect jobs.
  • The level of wage subsidy to remain at 80% for February and March given the vaccine roll-out programme will still be in its infancy and the trajectory of the virus uncertain over the next few months – it should then reduce to 70% in April and then remain at 60% from May.
  • The next phase of the CJRS not just to protect jobs, but to enable firms to train staff who are fully furloughed or working reduced hours and in particular, to provide funded skills development to anyone made redundant.

Cheese, who commended ministers for extending the furlough beyond October 2020, said: “It is crucial that government sets out a long-term plan to protect jobs beyond March, to help businesses plan with confidence and minimise the need to make more redundancies against an uncertain backdrop through spring and early summer.

“Extending the Job Retention Scheme to the end of June will give businesses the certainty they need to protect jobs while the vaccine is being rolled out. In addition, linking the scheme to support for training will help upskill or retrain staff in sectors that have been particularly hard hit by the pandemic, and provide skills development help for workers who are made redundant over the period.”

The CIPD recommends that the next phase of the CJRS to be linked to support to enable firms to train staff by enabling furloughing firms in England to use apprenticeship levy funding for other forms of accredited training and skills development, as well as apprenticeships.

Extending the Job Retention Scheme to the end of June will give businesses the certainty they need to protect jobs while the vaccine is being rolled out” – Peter Cheese, CIPD

To support smaller non-levy paying firms, the UK HR body proposes the creation of a CJRS training fund of up to £100m, which would be funded from levy paying firms’ expired levy funds that would otherwise go to HM Treasury.

It calculates this could pay for training or skills development support for about 160,000 workers in small firms.

“With agreement, the Scottish and Welsh Governments could allocate additional revenue to support training for firms using the CJRS during 2021, to ensure training support via the scheme is UK-wide,” wrote Cheese in his letter to Rishi Sunak, who will review the furlough policy in January.

“The government will of course be concerned about the cost of extending furlough beyond March, but its calculations must take full account of the costs of not doing so,” said Cheese citing the increase universal credit claims, and reduced confidence and spending power in the economy.

“Jobs that are lost over this period are also likely to feed into long-term unemployment as recruitment and onboarding costs will mean cash-strapped employers will hesitate to hire permanent staff again until they are certain about the strength of the economy.

“If we are to achieve economic and jobs recovery in the second half of next year, the government must raise its ambition on job protection and investment in skills.”

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