COVID-19 - Can academies use the Job Retention Scheme or furlough staff?

For staff funded by government grants the answer will be no. The guidance makes it quite clear that where staff are funded by government grants that are continuing, there is an expectation that the continuing grant funding will be used to cover staff costs.

The updated government guidance (17th April) does now take into account that there are some staff employed who are not be funded by government grants, and are usually funded by private income. It confirms that they are able to be furloughed, subject to certain conditions.

These are:

  • the employee works in an area of business where services are temporarily not required and whose salary is not covered by public funding
  • the employee would otherwise be made redundant or laid off
  • the employee is not involved in delivering provision that has already been funded
  • (where appropriate) the employee is not required to deliver provision for a child of a critical worker and/or vulnerable child
  • the grant from the Coronavirus Job Retention Scheme would not duplicate other public grants received and would not lead to financial reserves being created

Demonstrating good governance in these difficult times is even more important. The guidance is clear: 

  • “No organisation should profit from the exceptional financial support available, and should therefore only access the support required.” 
  • Also, “The DfE is considering appropriate measures to monitor the use of this scheme in order to detect any duplication of funding, and will be considering potential options to recover misused public funding as required.”

Academy Trusts must also consider also the Academies Financial Handbook in any transaction they undertake, for example considering if it is a novel or contentious transaction. It might be considered contentious if you claimed funding through the job retention scheme for staff members who were also paid through core funding. Decision making and record keeping must clearly demonstrate that the above 5 points have been assessed prior to a claim.

Finally, the claim is to be calculated in a slightly different manner than the usual scheme. It appears to be more closely linked to the levels of income as opposed to costs. For instance the guidance gives the example of parent paid school meals being 4% of total income. It is then clear that the maximum grant will be 4% of your paybill. There is a worked example in the guidance above.
If you are in any doubt whether a member of staff qualifies, we would recommend that you contact HMRC, DfE and your legal advisors. It will also be worth discussions with your HR advisor as to whether redundancy rules and employment laws may be a factor, and if there are any other unintended consequences. You must also consider relationships with relevant unions and any input there, as well as any potential pension issues.

Contingent workers in the public sector
The Cabinet Office has now published further guidance on payments to contingent workers by the public sector, including workers who are on PAYE, provided via an Umbrella company or a Personal Services Company.

The guidance makes it clear that these workers should continue to be paid as if their contracts are ongoing.

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