Charities can claim 80 per cent of workers’ wages from the government, if they would otherwise have been made redundant, under a scheme announced on Friday.
Rishi Sunak, chancellor the exchequer, announced the Coronavirus Job Retention Scheme, yesterday. It means that any employer can claim a grant from the government to cover workers who have been furloughed - placed on a leave of absence - due to coronavirus and social distancing measures.
Announcing the scheme Sunak said: “Any employer in the country – small or large, charitable or non-profit – will be eligible for the scheme.
“Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll, rather than being laid off.
“Government grants will cover 80 per cent of the salary of retained workers up to a total of £2,500 a month – that’s above the median income.”
The scheme is designed to protect jobs and people’s income during the coronavirus pandemic. It will cover the cost of wages backdated to 1 March and will be open initially for at least three months. The chancellor said he “will extend the scheme for longer if necessary”. Workers who would otherwise have been laid off due to the virus are covered.
The chancellor made the announcement at the same time as the prime minister forced bars, restaurants, clubs and gyms to close in an effort to contain the spread of the virus.
Charities welcomed the announcement but said a proper tailored package of support was urgently needed.
NCVO estimates that the sector will lose at least £4bn over the next 12 weeks because fundraising and trading income has dried up.
Some charities need continue or increase service provision but are facing a cash flow crisis. If no other support is made available some charities will need to decide whether to provide services now and risk running out of money in a few weeks or furlough workers and reduce services so that it will exist in three months time.
When asked about a broader package of measure for charities, Sunak said that “the significant business rates relief” will “certainly benefit” the sector and provide a “direct cash flow benefit”. He said that he was “actively talking to the secretary of state for communities” about “more support for voluntary and community groups” and that it “may well be that we should increase funding”.
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