CIMSPA responds to the Chancellor’s Winter Economy Plan

The Chancellor today announced his ‘Winter Economy Plan’ to support the economy through the next six months. Included in this was:

A new Job Support Scheme

This will replace the current furlough scheme which ends in October.

From 1 November, for six months, the government will cover some of the wages of employees who are working at least 33% of their normal hours. The employers would pay wages as normal for the hours worked, and then the government and employer would then each pay 1/3 of the remaining pay (up to a maximum government contribution of 22%).

For example:

• If an employee works 33% of their normal hours, the employer would pay 33% as normal. The government and employer would then each pay 22%, bringing the total pay up to 77%.
• If an employee works 50% of their normal hours, the employer would pay 50% as normal. The government and employer would then each pay 16.6%, bringing the total pay up to 83.3%.

All small and medium sized businesses are eligible, but larger businesses must show their turnover has fallen during the crisis. Employers can use it even if they have not previous used the furlough scheme it replaces.

Self-Employment Income Support Scheme

This will be extended to support viable traders who are facing reduced demand over the winter months, covering 20 per cent of average monthly trading profits via a government grant.

Loans

A “pay as you grow” scheme was announced for businesses, allowing them to extend their bounce back loans from six to 10 years, reducing their payments. Businesses can also move to interest-only payments or suspend repayments for six months if they are "in real trouble". Credit ratings will be unaffected.

The government guarantee on Coronavirus Business Interruption Loans will be extended to 10 years and a new successor loan guarantee programme will be announced in January.

Commenting on the announcements, Tara Dillon, CIMSPA CEO said:

“Any extension of support for businesses struggling through no fault of their own is welcome, but we fear this package on its own will not go far enough in protecting many parts of the fitness and leisure sector, especially community facilities.

“One third of public gyms, leisure centres and swimming pools have not been able to reopen, due to lost revenues during lockdown and ongoing restrictions on numbers. These facilities, which were thriving before Covid-19, employ thousands of people and also provide essential health, wellbeing and social services, often in some of the most disadvantaged communities. If lost now, these facilities could be lost for many years to come.

“We continue to call on the government to provide further, targeted support for the sector, including core funding similar to that provided to the arts sector, ring fenced funding for public leisure operators and a stimulus including VAT relief.

“With many self-employed workers in our sector, we will also be seeking further clarity on the extension of the SEISS, and are concerned that many are still not eligible for any financial assistance from the government.”