COVID “Mini-Budget” Highlights

Chancellor Rishi Sunak left the despatch box just after lunchtime, after laying out the key announcements of his summer statement.

The focus was on ‘jobs’ and as he laid out his three point plan to help people find work; to protect jobs and to create new jobs.

Not all measures apply across the devolved administrations.

 

 

 

 

 

 

 

Finding work 

There was a strong focus in the Chancellor’s speech on the specific challenges facing young people in the current economic crisis.  However he also acknowledged that other groups e.g. women would also struggle given the unprecedented scale of the pandemic and its wider effect on the labour market. 

Sunak announced an expansion across Jobcentre Plus, creating more Work Coaches. This expansion appears to be focussed primarily on Universal Credit claimants in the Intensive Work Search Group.

He also laid out details of a ‘kickstart’ scheme to help young people (16-24) on Universal Credit, who are at risk of long term unemployment.

The scheme will run across the UK, supporting employers who create new and additional jobs to employ young people.  The Government will pay 25 hours per week of the salary at minimum wage, (employers can top this up) and also some additional overhead costs (national insurance and auto-enrolment), for 6 months. The scheme is due to open next week.

Additional investment will also be made in the Flexible Support Fund which is supposed to help claimants overcome barriers to entering work. 

Protect jobs

The Job Retention Scheme will still wind up in October. The Treasury has highlighted that over 9 million jobs have been furloughed.

A £1000 Job Retention ‘bonus’ will now be available for every employee brought back from furlough, and kept in a good job until at least 31 January 2021.  Some commentators are arguing that this may only put off the loss of jobs likely to happen as the furlough scheme ended. 

Employees must earn, on average, £520 per month, between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021.

More detail has been promised by the end of this month. 

The Chancellor acknowledged the risks facing many employees as furlough ends and for the third sector, it remains to be seen whether the new retention bonus will be enough to help organisations cope with the oncoming economic storm.  As businesses can only claim after the fact, there would need to be enough of a cash flow to pay salaries during the November to January period, once furlough ends.

It is hoped that reductions in VAT (from 20% to 5%) linked to hospitality and tourism businesses/attractions would help save jobs in this sector.

An “Eat out to Help Out” scheme will enable businesses to claim back discounts offered on meals during August. Businesses will need to register for this.

 

 

Creating Jobs

It is hoped that investment in infrastructure (announced previously) and on supporting home energy improvements will create jobs.

A Green Homes Grant on offer to home owners and landlords to help make houses more energy efficient. Measures were also announced to make public sector buildings ‘greener’.  

This particular announcement (and others e.g. investment in apprenticeships) may have implications for the Scottish Budget.  The “Plan for Jobs” document suggests £2.1 bn for the Scottish Government but does not provide more detail.  One response to the Chancellor’s statement suggests that there may be £800m available to Scottish Ministers. However, an early response from the Scottish Government suggests a figure far lower (£21m).  

Early responses to the “mini-budget” highlight the lack of focus on others who are particularly at risk from the economic impact of the COVID-19 pandemic e.g. older workers

To see more detail visit the UK Treasury site. We will also share other analyses of what this statement means for Scotland and for charities. 

A full spending review and Autumn Statement will go ahead later this year. 

Back to News
Website by AgencyForGood

Copyright 2024. All Rights Reserved

0
    0
    Your Basket
    Your basket is emptyBack to Home Page
    Skip to content