The chair of the Digital, Culture, Media and Sport (DCMS) Committee has warned that the UK government’s new Job Support Scheme may not be enough to stop unprecedented redundancies in the cultural sector.
The replacement for the furlough scheme, which ends on 31 October, was announced by chancellor Rishi Sunak yesterday.
Under the new scheme, the government and the employer will each pay a third of the wages for hours not worked by an employee – but only if the employee is working at least a third of their usual hours.
This means that an employee working a third of their usual hours would receive 77% of their usual pay.
The minimum hours threshold is intended to make sure the scheme only supports “viable jobs”. After three months, the government will consider whether to increase this threshold.
The government’s support scheme for self-employed workers is also being extended for another six months. Grants for the first three months will cover up to 20% of average monthly profits, but the criteria for the scheme exclude many self-employed cultural workers.
The new measures come as large-scale redundancy plans are being carried out at many cultural institutions including Tate, Southbank Centre, Historic Royal Palaces and the National Trust.
Reacting to the government's announcement, DCMS Committee chair Julian Knight said: “We welcome this economy-wide intervention from the chancellor. However, it still leaves many hundreds of thousands of workers in events, arts and cultural parts of the economy with a grim future.
“The truth is, three times as many people in these sectors are currently on furlough than the national average, which suggests that the Job Support Scheme may not be able to stop unprecedented redundancies and many organisations from facing extinction.”
In a letter to culture secretary Oliver Dowden on 23 September, Knight pointed out that he had “called on the chancellor to extend the furlough scheme for the arts and leisure sectors that are unable to reopen at full capacity due to government restrictions”.
“Otherwise, the arts face an imminent end to workforce support measures, while the emergency financial package for cultural institutions is not sufficient to secure their long-term viability or workers' livelihoods,” wrote Knight.
Trade unions have said the Job Support Scheme will be inadequate to save jobs.
Prospect’s general secretary Mike Clancy said: “The new Job Support Scheme is better than nothing, but it will do little for sectors that will still be effectively closed by government restrictions, who will not be able to bring workers back for the minimum number of hours.
“And while millions of self-employed workers were desperate for more support from the chancellor they have been overlooked and left out once again, with a bleak winter in prospect for thousands of families.
“The chancellor must revisit this plan and find a way to target support at areas of the economy where there is really acute need – otherwise we risk doing permanent damage to the foundations of our economy.”
Mark Serwotka, general secretary of the Public and Commercial Services (PCS) Union said the measures announced by Sunak were “akin to using a plaster to cover a gaping wound”.
“Our members in the commercial sector, aviation and culture are already being threatened with hundreds of redundancies, as employers seek to capitalise on the economic fallout from Covid-19,” said Serwotka. "No one should be losing their job due to the coronavirus pandemic and that is why the furlough scheme should be extended.”
PCS said “the partial extension of government support for jobs at the end of the furlough scheme offers employers an opportunity to avoid redundancies. We are therefore demanding a moratorium on redundancies whilst employers in the culture sector work out what the scheme means for them”.
Caroline Norbury, CEO of the Creative Industries Federation, expressed concern that “many of the sector’s self-employed workers – including limited company contractors, PAYE freelancers and the newly self-employed – will continue to fall through the gaps in government support”.
“Many of these people have seen all of their work dry up overnight and it remains vital that they are supported as a matter of urgency,” said Norbury.