Furloughing staff in education sector: new guidance

On 17 April (updated on 22 April) the Department for Education published additional guidance on government financial support for education, early years and children’s social care. This includes new guidance on the conditions that need to be satisfied if higher and further education institutions are to access the Coronavirus Job Retention Scheme.

HMRC’s general guidance on the Scheme (which has changed at frequent intervals since it was first published on 26 March) has little to say about access to the Scheme by what it terms the “public sector”. However, it does state that few such organisations are expected to access the Scheme, since they will normally be in receipt of public funding to cover staff costs.

The DfE has recognised that more detailed guidance would be helpful in the education sector, since the way educational institutions are funded is complex. Its new guidance sets out the criteria that need to be satisfied before it would be appropriate to access the Scheme. Many of these overlap with general eligibility conditions, and clearly staff occupying posts which are fully covered by public funding already received can’t be furloughed. This means that the main focus will be on particular, institution-specific conditions.   For HE institutions the final criterion listed reads as follows:

“the grant from the Coronavirus Job Retention Scheme would not be duplicative to other public grants that the HE provider receives and would not lead to financial reserves being created”

The challenge for HEIs for any role where there is currently no work is determining whether they are covered by public funding and therefore excluded from the Scheme.  The DfE acknowledges that this may be difficult to determine in some cases and that some staff will be funded through multiple sources.   The guidance addresses where it is difficult to distinguish the source of funding for a relevant individual’s salary between public and commercial income.  It states that in these circumstances:

 “as a guiding principle, HE providers should not seek to furlough a higher proportion of their wage bill than could reasonably be considered to have been generated through commercial income, including from non-public research grants and contracts”

Further changes to both the generic and education-specific guidance is likely once the Government has more experience of how the Scheme is being used, and there are still some unanswered questions about the detailed operation of the Scheme. However, this latest guidance from the DfE is a useful starting point as educational institutions make decisions about how and when to access the Scheme.

For more information about the furloughing scheme and other Government support, please visit Mills & Reeve’s coronavirus hub.

 

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