The furlough scheme is helping a large number of schools to reduce their overheads at a time when their revenue has been reduced by fee discounts and in some cases pupils not returning in September 2020. Boarding schools have been particularly affected with some pupils opting to remain in their home countries, even as schools re-opened on 8 March, and continuing to access their education remotely. It was therefore a relief when the Chancellor announced that the furlough scheme (Coronavirus Job Retention Scheme) will be extended until the end of September 2021.
The scheme has already been extended twice and following the last extension the scheme was due to end in April.
Currently the furlough scheme pays 80% of an employee’s wages (capped at £2,500 per month pro rata) for the hours they cannot work due to the pandemic. This will continue until the end of June. However, the government contributions will begin to reduce so that: –
- From July, the government will contribute 70% and employers will have to pay 10% for hours not worked; and
- In August and September, the government will pay 60% and employers will have to pay 20% for hours not worked.
This represents a gradual phasing out of the scheme.
Since 1 July 2020, flexible furlough has been permitted, whereby schools have been able to determine the hours that they need certain staff to work, with those staff being on furlough for those periods that they are not required to work. Many schools have utilised this option, particularly when schools were closed, benefiting from the flexibility that this provides. This will also continue until the end of September.
