Source · Select Committees · Public Accounts Committee
Recommendation 16
16
The initial CJRS scheme was due to end on 31 October 2020.
Conclusion
The initial CJRS scheme was due to end on 31 October 2020. In September, the government announced that it would be replaced by a Job Support Scheme (JSS) that would top up the wages of workers working at least one-third of their normal hours, with the employer also contributing.38 HM Treasury told us that this scheme was developed at a time when the “hope was that the economy would be largely open and recovering, but with particular temporary restrictions in particular areas”.39 The JSS was amended by government on two subsequent occasions, with an announcement on 9 October stating that where businesses were legally forced to close due to lockdown restrictions the government would pay two-thirds of wage costs, with the employer not obliged to top that up.40 A second modification on 22 October decreased the percentage of hours that an employee would be expected to work for businesses still open and increased the government contribution to topping up wages.41 However, by 5 November the government had moved all of England back into a full lockdown and subsequently announced that CJRS would be extended on broadly equivalent terms to the way the scheme had been operating back in August.42 Government also announced that SEISS would be extended to the end of January 2021 at the rate of 80% of a self-employed person’s trading profits. This was a more generous offering than previous versions of the SEISS extension that had been announced during September and October.43 We were concerned that constant changes to the levels of financial support available across the different schemes created job instability with businesses and employees,44 and also impacted on the future funding settlement for the devolved administrations.45 36 Q 49, C&AG’s Report, figure 6 37 Qq 82–83 38 C&AG’s Report, para 1.23 39 Q 55 40 C&AG’s Report, para 1.24 41 HM Treasury, Plan for Jobs: Chancellor increases financial support for businesses and workers. Available at: www.gov.uk/government/news/plan-for-
Government Response
Not Addressed
HM Government
Not Addressed
6: PAC conclusion: Too much chopping and changing of the new schemes has created uncert ainty for the UK nations, regions and businesses, regarding financial support and job securi ty. 6: PAC recommendation: The Departments should provide as much clarity and forewarning as possible about the employment support arrangements that will be available for UK nations, regions and businesses under conditions of national lockdown, regional lockdown and easing of restrictions for the remainder of the covid-19 pandemic. It should commit to this ahead of the Treasury minute response so employers can be clear that they can plan ahead with greater certainty. 6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 Both departments are committed to providing as much clarity and forewarning as possible on support arrangements. For example, on 17 December 2020, details were announced of the extension of CJRS to the end of April 2021, on its current terms. 6.3 Providing certainty has to be balanced with the need to be responsive to the evolving direction and impact of COVID 19 and tailoring the economic support to match the circumstances. The government's principle has always been that financial support will follow the path of the virus. This will sometimes mean needing to review policy at short notice where the nature of the pandemic has changed significantly, such as when the CJRS was extended in October 2020 until March 2021. In December 2020, when lockdown tightened across more of the country, CJRS was extended on its existing terms to the end of April 2021.