News that the government may be seeking to make changes to the Covid-19 wage subsidy scheme has been greeted with a call for caution.
The furlough scheme is believed to have cost around £8bn as at 3 May, and the Chancellor, it’s understood, is keen not to have staff off work, at home, and at considerable cost to the public purse.
A number of options are thought to be up for consideration, including cutting back the 80 percent wage subsidy to 60%, according to accountancy firm Saffery Champness.
Rishi Sunak could also lower the £2,500 monthly cap on payments made through the scheme, or allow furloughed employees to work part-time, with a portion of their salary being met by their employers.
It is thought that changes to the scheme could be implemented in July.
Mr Sunak is also reported to be considering plans to change the scheme for the self-employed, including a reduction in the cliff-edge trading profit maximum from £50,000 to £30,000.
Applicants are yet to be able to claim, although government has brought forward the opening of its new claim service to 13 May. Claims should be paid on 25 May, or within 6 working days of a claim.
Martyn Dobinson, partner at Saffery Champness, said it needs to be a 'delicate and careful' process: "People need to return to work when it is safe to do so but, for many, working practices are likely to have dramatically changed.
"Much depends also on the ability to adopt safe social distancing measures in the workplace, as well as other factors," he said.
“For many, their employers will have scaled down their businesses and what must be avoided is a precipitative rush towards redundancies."
Saffery Champness anticipates an announcement by mid-May. It said that inevitably there will be 'casualties', and much depends on how soon the economy, in the broadest sense, can restart.
"Caution needs to be exercised with scaled measures introduced over time. That must be the way," Mr Dobinson said.
