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Most operators unable to contribute to Coronavirus Job Retention Scheme

By Nicholas Robinson contact

- Last updated on GMT

Needing help: most operators will need continued Coronavirus Job Retention Scheme support
Needing help: most operators will need continued Coronavirus Job Retention Scheme support

Related tags: Coronavirus

Cash-strapped pub operators will be unable to pay towards the Government’s Coronavirus Job Retention Scheme (CJRS), also known as furlough, when their businesses are permitted to reopen.

So far the Government has paid 80% of furloughed staff salaries, with businesses able to top up individuals’ wages by an additional 20% themselves if desired.

The current scheme will run in its existing format until the end of July, however, Chancellor of the Exchequer Rishi Sunak earlier this month announced that while the scheme would be extended until the end of October, it would not continue in its current​ format.

What level of support could you contribute to the Coronavirus Job Retention Scheme from August if you haven’t yet begun to operate at full capacity?

  • 42% said they could contribute 0%
  • 10% said they could contribute 10%
  • 16% said they could contribute 20%
  • 5% said they could contribute 30%
  • 2% said they could contribute 40%
  • 4% said they could contribute 50%
  • 18% said they didn’t know how much
  • 3% said they could contribute more than 50%

“From August to October, the scheme will continue for all sectors and regions of the UK but with greater flexibility to support the transit back to work,” he said.

Furloughed employees back part time

“Employers currently using the scheme will be able to bring furloughed employees back part time.”

There is little clarity on what an updated CJRS will look like, with industry leaders and analysts speculating it could see Government continue to contribute a percentage to salary while operators have to top up the rest.

If some form of contribution is necessary, the majority of pub operators, asked in a snap poll of hospitality industry leaders carried out by HIM and MCA, said contributing any amount would be impossible if they weren’t operating at full capacity.

Of the 464 hospitality business leaders asked, 42% of the 302 pub industry respondents said they would not be able to contribute anything to the job retention scheme if they weren’t operating at full capacity.

A multiple operator said: "Our ability to top up furlough is based on our income. We won't be able to start paying 20% of the salaries of people furloughed unless there's enough income to pay the bills.

"In this scenario, we will look at the redundancy routes for excess numbers, and recruit as we ramp up when we do need the numbers.

"We will be able to afford to top up salaries and operate at a more robust level if something like the #NationalTimeOut campaign is successful as our rents in London are the number one fixed cost and therefore the fundamental issue with not being able to trade as before."

We need the CJRS

“We need the Coronavirus Job Retention Scheme to carry on until social distancing disappears and we can trade at 100% capacity,” said one multiple pub site operator.

A single-site operator said: “We don’t believe we could survive if we partially open. Our existence is reliant on operating at full capacity, mainly weekends but unless we maximise our footfall we wouldn’t manage to pay the bills. If we up the prices to help, we would lose people to other establishments, it’s a worrying situation and something we try not to think about in the hope a vaccine is found and normality returns.”

However, 40% of the pub operators asked said they would be able to contribute anywhere between 10% or more to CJRS salaries.

Meanwhile, a senior Government source recently toldThe Morning Advertiser ​that Government support for pubs would not fall off a cliff edge and would instead taper.

Related topics: Legislation

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