What does the chancellor’s Summer Budget 2020 mean for designers?

Today’s “mini-budget” saw the debut of the government’s plan for jobs, with Sunak promising no one “will be left without hope”.

When Rishi Sunak delivered his inaugural Budget back in March, the UK was in the early stages of the coronavirus pandemic. In the time since, the country has spent tens of billions attempting to protect the economy from the effects of the virus; has seen as many as 9.3 million workers furloughed from their jobs; has spent 12 weeks in lockdown; and has experienced a 25% shrink in its economy.

The government stance four months ago, and indeed Sunak’s own promise, was that no one would be “left behind” in the fight against the virus, which has so far claimed the lives of at least 44,000 people in the UK, and more than half a million globally.

Delivering on such a promise hasn’t been so straightforward, as many designers will know: a stumbling start meant government support left freelance workers out in the cold, and provisions since have continued to ignore the needs of personal service company owners. Indeed, an estimated one million people have “fallen through the cracks”, according to a report published last month.

Today’s announcement saw a slight amendment to the nobody left behind promise, with Sunak instead stating in the Commons that “no one will be left without hope”. The centrepiece of the chancellor’s statement was the government’s new “plan for jobs”, which aims to protect, create and support employment, as per “phase two” of its COVID-19 action plan.

Jobs Retention Bonus could provide “reassurance”

Thought there was no further word on how the government will be supporting the UK’s arts sector, the chancellor’s job plan is something designers will want to pay attention to.

As was expected, Sunak has definitive plans to draw a line under the furlough scheme, which will end in October despite many having called for its extension. Leaving the scheme “open forever”, as he puts it, would give people false hope that it could be possible for furloughed workers to return to jobs they had before the pandemic.

In its place, Sunak offers the Jobs Retention Bonus – an initiative that will see the government pay businesses £1,000 per employee for every person brought back into the workplace from furlough.

Such a measure is a positive step, according to Moore Kingston Smith partner Mike Hayes, who says this will “provide reassurance to their employees as well as the companies themselves”. According to a report covered by Design Week in April, some 89% of design businesses had or were contemplating furloughing their staff, so this could be a welcome boost for many.

But a “cliff-edge” end to furlough still a reality for many

However, as shadow chancellor Annaliese Dodds pointed out in her response to Sunak’s statement, such a bonus could mean nothing to businesses if they simply don’t have the cashflow available to bring people back in the first place.

This is a situation Design Business Association CEO Deborah Dawton points out too. She says: “The additional government incentive of £1,000 for every worker who returns from furlough and who is still employed at the end of January, won’t help many whose forecasts for Q3 and Q4 are woefully diminished.”

As statistics in the above-mentioned report show, the Coronavirus Job Retention Scheme has been well-used in the creative sector. As for how a “cliff-edge” could be avoided come October, Dawton says she is in talks with both DBA members and the government.

Schemes to counter long-term youth unemployment

Working alongside bonus handouts will be the all-new Kickstart Scheme, which Hayes says could be helpful for design businesses that are looking to expand in the near future, but are “concerned about taking on new staff”. The scheme takes aim at the looming threat of mass youth unemployment as a result of the coronavirus crisis, and will see an initial £2 billion set aside to fund the creation of hundreds of thousands of jobs for young people who are at risk of “long-term unemployment”.

The fund will subsidise six-month work placements for those aged between 16 and 24, paying their wages in line with the national minimum wage as well as a contribution to “overheads”. Dawton says the DBA will encourage members to take a look at such a scheme, given the array of talent that is on offer from the Class of 2020.

Additionally, she says this is a good time for graduate designers to be making themselves heard: “Start writing to the agencies that you dreamt of working for and tell them why they should be taking you on now – don’t wait until after the summer – the potential jobs will all have gone in the next few months.”

Additionally, apprenticeships and traineeships will be encouraged by way of financial incentives. Firms will be paid £2,000 for every apprentice they hire aged under 25, and £1,500 for every apprentice older than 25. Hayes tells Design Week that such measures “will be of great benefit to the creative sector”.

Design Council CEO Sarah Weir echoes this thought, saying: “To build a robust and lasting recovery requires skills and retraining initiatives to ensure that everyone has the design skills they will need for future jobs, automation and Britain’s changing trading and economic relationships with the world.

“These measures are vital and immediate.”

Designers will be “essential” for green recovery

According to Weir, not only was this summer statement a chance to see what the future holds for designers, but also what designers hold for the future. Alongside talk of jobs, Sunak highlighted the need for the UK to engage in a “green” recovery from COVID-19 – it’s here that Weir believes designers will play a key role.

“As we square up to the largest global recession since records began, design is essential for the next stage of recovery, across sectors,” she says. “In building back better through infrastructure, housing, high streets and the green economy, design will deliver high economic, social and environmental returns.”

Sunak says he wants a “green recovery with concern for our environment at its heart” and he’s supposedly willing to shell out billions to make it a reality. Vouchers coming from a £2 billion pot, and worth up to £10,000 per household, will be made available for landlords and homeowners to subsidiser eco-friendly and energy efficient home improvements, while another £1 billion is being allocated to make public buildings greener.

As Weir suggests, there are likely to be designers and innovators that can become part of this recovery plan.

What else happened?

  • VAT has been cut for the hospitality sector, decreasing from 20% to 5% on food, accommodation and attractions. The cuts will last from today until 12 January 2021.
  • Additionally, an “eat out to help out” discount has been announced to encourage consumers to spend money at restaurants and cafes. Diners will be offered 50% off up to a maximum of £10 per head at participating outlets.
  • Stamp duty has been cut to reinvigorate the housing market. Sunak has increased the threshold from £125,000 to £500,000 effective immediately. This will run until 31 March 2021.
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