No support for FE and training in Sunak’s Winter Economic Plan
Yesterday, Chancellor Rishi Sunak outlined his “Winter Economic Plan” for supporting the business community through the second wave of Coronavirus.
As part of this plan, the Chancellor announced a new flagship policy, the ‘Jobs Support Scheme’ to replace furlough and outlined extensions to loan deadlines, as well as maintaining the current 5% rate of VAT to help the tourism and hospitality sectors. There were however, no new or expanded incentives or programmes related to training, skills, apprenticeships or other similar interventions.
The Winter Economic Plan at-a-glance
New Job Support Scheme
This is aimed at supporting jobs and allowing firms to preserve viable employment, supporting people who are in work on shorter hours rather than making them redundant. The Chancellor added that it is "fundamentally wrong to hold people in jobs that only exist inside the furlough".
- Workers will have to work a minimum of a third of their normal hours and will be paid as normal for those hours. The government and employers will cover the remaining two thirds of pay lost through reduced hours.
- This applies to small and medium sized enterprises. Larger employers will only be covered if their turnover has gone down (threshold to be confirmed).
- All employers will be allowed to apply, even if they did not use the furlough scheme.
- Firms can use it alongside the job retention bonus.
- It will run for 6 months starting in November
Self-employed grant extended
- There will be an extension to the self-employed grant on similar terms and conditions as the new job support scheme.
Loan deadlines pushed back
- To give small businesses more time and flexibility, there is a new "pay as you grow" for Bounce Back loans which can be extended from six to ten years. This is intended to nearly halve the average monthly repayment.
- Struggling firms can make interest-only repayments and anyone can apply to suspend repayments for up to six months. No companies will see their credit ratings affected.
- Business interruption loans will have their government guarantee extended to ten years.
- The extending deadline of all loan schemes will be pushed back until the end of 2020.
- A new successor loan guarantee programme will also be rolled out in January.
Extension of VAT cut
- The 5% rate of VAT will remain in place for hospitality and tourism until the end of March 2021 and won't go back up to 20% in January.
Support for public services
- The pledges previously given regarding additional funding and extra where needed will continue for the NHS and other public services.
It’s likely that the Winter Economic Plane will take the place of the Autumn Budget and comprehensive spending review (although this is to be confirmed).
Mobilising support for young people
Young people have already been disproportionately impacted by the pandemic and there is a real risk that the 16-24 age group will suffer sustained unemployment in the years to come. To combat this, NCFE recently launched its ‘Go the Distance’ initiative - studying the economic and labour market environment, and drawing actionable insights to help providers design and deliver brilliant youth employment programmes.
To find out more, visit our 'Go the Distance' webpage.