Cumbrian accountancy firm, Lamont Pridmore, believes the new Job Support Scheme (JSS) will help viable businesses to retain staff, but it will not be as effective as the previous furlough scheme.

At its peak, the furlough scheme, also known as the Coronavirus Job Retention Scheme (CJRS), supported around 9.6 million workers within 1.2 million businesses across the UK.

This CJRS is due to end on 31 October 2020 and will now be substituted by the JSS from 1 November under the Government’s recently announced Winter Economy Plan and will run for six months until the end of April 2021.

Unlike the CJRS, the new scheme is only designed to keep employees in ‘viable’ jobs on short-term working, rather than subsidising a person’s entire wage while they cannot work.

Open to all SMEs and large businesses that can show they have been adversely affected by the Coronavirus crisis through reduced revenues, the JSS will ensure that workers are paid at least 77 per cent of their usual wages.

But Lamont Pridmore’s chief executive, Graham Lamont, said the way this is achieved may mean that some businesses are still not able to retain all jobs.

“Under the terms of the JSS, employees must work at least 33 per cent of their usual hours and be paid in full for those hours by their employer,” he said.

“The employer must also then pay one-third of the hours not worked – an amount which will be matched by the Government up to a cap of £697.92 a month.”

He said that the scheme, while offering support, was not as generous as the CJRS and that those only working slightly fewer hours would only receive a minimal Government grant.

Graham added: “Where a person is working 70 per cent of their regular hours, the Government grant only amounts to 10 per cent of their normal wages, with the employer contributing 80 per cent to ensure employees effectively receive 90 per cent of their normal earnings.

“Therefore, the Government grant amount is far less than the furlough scheme, which at its height provided grants of up to 80 per cent.”

Graham added that those working 50 per cent of their regular hours will get a Government grant worth 17 per cent of their normal hours (with employers contributing 67 per cent), while those working just 33 per cent of their regular hours will get support via a grant equal to 22 per cent of their normal hours (with employers contributing 55 per cent on top).

“In certain scenarios, it may cost an employer less to dismiss two staff members and keep one working full-time, rather than having three employees on short-time working through the JSS. Unfortunately, some employers may, therefore, still feel the need to make some staff members redundant in the coming weeks and months.”

The JSS is part of a package of support to help businesses in the coming six months as the Government attempts to reduce the Coronavirus infection rate through new local and national restrictions.

Chris Lamont, partner at Lamont Pridmore, added: “The last six months have been extremely tough for businesses, even with the Government’s substantial financial support and they have a long road to recovery ahead.”

“That is why we continue to stand side by side with the region’s business owners, offering help and support with implementing these schemes, scenario planning and strategies to help businesses survive and thrive”, he added.