Furlough latest: What designers need to know for lockdown 2.0

Update 6 November 2020: Rishi Sunak has further extended support for the self-employed and employees until March 2021. It comes as the government says the economic impacts of the pandemic will last longer than any restrictions. 

Update 3 November 2020: The Government has announced that help for the self-employed will also be changed in line with the incoming lockdown. The Self-Employment Income Support Scheme (SEISS) will be doubled – paying workers 80% of their average income.

People using the SEISS will be able to apply for the extra support from the end of November, rather than mid-December as originally planned. 

The Coronavirus Job Retention Scheme (CJRS) – also known as the furlough scheme – will continue into December, the government has announced.

Prior to this weekend, the scheme was slated to end. In its place, the government planned to institute the Job Support Scheme (JSS).

But in line with a rise in coronavirus cases and deaths, further lockdown measures have been announced for England. As a result the JSS will not be rolled out, with the chancellor instead sticking with the furlough scheme.

Back to the original furlough scheme

The furlough scheme has been in place in various capacities since April.

As it geared to close at the end of October, the support package was offering employers 60% of furloughed employees’ wages. This then needed to be topped up 20% by firms, thereby giving workers 80% of their average pay packet up to £2,500. Employers were also asked to make National Insurance and pension contributions.

Under new lockdown measures, the scheme will be reverting back to how it was first introduced. The government will pay the total amount of 80% of an employee’s wage, up to the £2,500 cap.

Firms will only be asked to contribute National Insurance and pension costs, which accounts for 5% of total employment costs on average. All in, the government says this extended furlough scheme is “more generous” than it was in October.

Last month, a Design Week poll revealed 56% of readers were still on furlough, with no idea when they would be brought back. While the news suggests the government has given another month-long buffer for employers, the extension of furlough at the eleventh hour means many of these jobs may have already been lost.

What about self-employed workers?

So far, there is no word on if and how the support on offer to self-employed workers will change. Reacting to the news over the weekend, Creative Industries Federation CEO Caroline Norbury said it was vital that parity was sought between employees and the self-employed.

“A third of the creative workforce is freelance, and many will see all of their work cancelled as a result of these new measures,” she said in a statement. “They cannot be expected to live on 40% of their income or less, whilst colleagues on payroll receive 80%.”

Norbury also said that the suspension of the Universal Credit minimum income floor should be extended beyond November too, since “more and more creative practitioners turn to that means of support as a vital lifeline”.

Business grants

Alongside changes to the furlough scheme, the government has announced a series of business grants which will be available to firms forced to close in England.

Grants will be handed out bases on the rateable value of a property – those working in a premise worth £15,000 or under will receive £1,334 per month; between £15,000 and £51,000 will receive £2,000 per month; and more than £51,000 will receive £3,000 per month.

Additionally, the government says £1.1 billion is being given to local authorities, which will allow for one-off payments to help support businesses more broadly.