AELP Advice: Can providers accessing public funding furlough staff? (27/03)

In light of numerous queries coming in today on whether providers can furlough their staff linked to last night’s latest government guidance, we are issuing members with further advice to support on this.

The government guidance last night states the following:

 

“The government expects that the furlough scheme will not be used by many public sector organisations, as the majority of public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak.

Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them. This also applies to non-public sector employers who receive public funding for staff costs.

Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff. In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.”

 

In essence, what the government wants to avoid is a situation where they could find themselves paying twice. Firstly, through paying for a service and then secondly, also shouldering the cost of 80% of wages at the same time of individuals supposedly delivering that service – you either have one of those two options, but not both.

In the case of granted-funded providers, where funding has been confirmed that it will be paid on profile regardless of actual delivery, then it would be unreasonable for grant-funded providers to need to use the furlough scheme to subsidise staff wages.

Where funding is paid on actual delivery (contract for service) providers will see their income impacted significantly – through a combination of low/no starts and breaks in learning for existing learners. In these scenarios, providers may choose to put their employees on the furlough scheme to offset their staffing costs with the temporary loss in income.

If the government were to change its position and pay providers on profile instead of on actuals it would be expected that the providers bring their employees back into work and removes them from the furlough scheme.

 

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