Rishi Sunak due to give update on future of jobs-saving initiative later today
The Construction Leadership Council has said the government’s furlough scheme should be phased out rather than completely stopped when it is due to finish at the end of next month – after revealing more than eight out of 10 firms in the industry are using it.
Rishi Sunak is due to unveil details of the next phase of the initiative later today with the chancellor reportedly set to extend the scheme until September at a reduced rate of 60%. Staff are expected to be able to top up their salaries by coming back to work on a part-time basis.
Introduced in March, the initiative was originally due to be phased out at the end of this month.
But the scheme, which currently sees the government pay 80% of a worker’s monthly wage up to £2,500, was extended until the end of next month by Sunak.
Business groups have warned that getting rid of it completely on 30 June will spark a wave of mass redundancies across the private sector.
The CLC said: “The true value of the scheme to both the industry and the country has been that it has prevented large scale redundancies that would have occurred but for the assistance provided by the government. Should this end too soon then a wave of redundancies will rock the industry.”
In its 60 page briefing document outlining how it plans to ease the lockdown measures, the government yesterday said over six million workers from 800,000 firms have been furloughed.
According to the CLC, 84% of the industry has furloughed workers with contractors typically furloughing more than 60% of staff with SMEs furloughing between 90% and 100% of staff.
Consultants have fared better furloughing less than 20% of employees, although SMEs have had to furlough over 70%.
But the CLC survey found that suppliers and merchants have been the hardest hit with this sector typically furloughing more than 90% of staff.
The survey also said 48% of respondents had furloughed more than 50% of their staff for several months while more than 50% said work had completely dried up because of the lockdown.
Now the CLC is calling for the scheme to be wound down in phases with the government stepping in to pay 60% of salaries in July and August, up to 40% in September and October and up to 20% in November and December. It added the £2,500 limit should be maintained.
But the CLC said even if the government was to take up its suggestion, job losses would still be on the cards. “Although we recognise that redundancies may be unavoidable, we feel that the government does have a role in stabilising the jobs market in the short to medium term until such time as it lifts the restrictions to commerce and private life.”
The CLC also said the industry should set up a talent retention scheme to prevent scores of workers leaving it for good.
It said this could include loaning teams or individuals to rival businesses to keep them in employment and setting up an online portal to allow those facing redundancy to access jobs within the industry.
The CLC also said a series of criteria needed to be met to enable a return to work.
It has broken these down into government enablers and commercial enablers.
• Childcare will need to be addressed as families will need to be confident that their children will be provided for before they return to work. This will mean schools and day care services reopening before the furlough scheme comes to an end
• Public transport will need to enable more people to travel safely between home and work
• There is a need for the HSE to maintain temporary relaxations on extended home working without full DSE provision if staff are to return to work
• There should be a relaxation on stamp duty to encourage purchases
• There should be an automatic HMRC PAYE deferral for 3 months
• Alongside relaxing Tax and VAT payments further into the financial year with payment plans agreed with both parties
• Government should ensure a maximum of 30 days payment for all works
• Changes to the redundancy consultation arrangements for larger businesses should be brought in
• Offices and sites will need to be able to be accessed safely and easily by staff. Very clear H&S / PPE requirements (and availability) must be introduced with available testing for the workforce
• Clients/ main contractors/ major contractors should release retention money
• There should be more use of shift working on sites to overcome (some) social distancing constraints and alleviate pressure on roads and public transport
• Supply chain employers should be fully reimbursed by clients/ main contractors/ major contractors for any additional wage costs incurred as a consequence of the introduction of shifts
• If social distancing and other restrictions are still in place for some time, completion dates must be lengthened, with no costs for overrunning contracts or penalties
• End-user clients, including domestic householders, should receive clear, consistent and regular reassurance that adequate safeguards are in place to ensure their and others’ safety from infection