The Many Holes in Furlough
From today we’ll start to see the major flaws in the government’s furlough scheme. A good idea in principle, but scuppered by the complex employment situations of millions of people. Here I use myself as a minor, but hopefully interesting, case-study.
Firstly, I should say that I’m in a fortunate position. I have savings (for a future house), I still have some freelance work and my partner is able to work from home. I’m lucky that I’m not going to be destitute in any of these scenarios, but people in similar situations could be, and in my view this is driven more by ideology in government than personal circumstance.
Like many people, I work in a few different ways. In the past 3 years I’ve worked as a supply teacher, a permanent teacher, resource creator and freelance journalist. In none of these years have I made more than half my income from self-employment, that has been a future goal, one I was hoping to achieve this year. I dropped some hours in my teaching jobs 3 years ago, rather than leaving altogether, to avoid the cliff edge with cashflow. Since then I’ve pursued what I really love to do — tell stories. I view the ability to mix and match my work as a basic right.
It’s gone well, I’ve picked up work producing podcasts and written material, presented at industry conferences and even started to have people contact me to produce things. That was a big deal for me, not having to chase everything in the dark. I felt like I was crossing a threshold into being a self employed professional.
Working for yourself is obviously precarious at times, but it’s very rewarding. Having other regular income has taken the pressure off my freelancing and meant I can build up my contacts and contracts with the work I want to be doing, rather than having to take things on to pay the bills. A separate income has helped to partition things so that I can create the business I want to work in. In the creative industries this is far from unusual. Unfortunately it instantly rules me out of any of the self-employment support from the government.
I left my permanent, part-time, teaching role in December. Bad timing! I signed up with a supply agency (Hays), who I’d worked with before, and started to do some supply teaching to save a little money. That is, until the schools shut. I was contracted for 2 more weeks up to Easter, but there was no notice of cancellation from Hays. It was implied by the school, but not given directly. They would naturally assume that as Hays are my employer it’s their job to inform me.
As an agency worker it is perfectly possible to furlough me. In fact, it’s really the only option. No school is going to need any supply teachers while only 10% of the pupils are attending. And yet there is nothing from Hays. My own contact at Hays has been furloughed.
And that’s it. No more work. No furlough pay. No self-employment support.
There are a few issues at play. Guidance on what agency workers should be paid seems to be incomplete. Hays have not communicated anything about what they’re doing about this, save for a single email saying they’re looking into it, with a link to fill in a short form with information they already have.
It seems there are a few sticking points. Agencies don’t want to incur extra costs due to having to pay Holiday Pay to furloughed workers. It doesn’t appear that they would need to do this, but there is a lack of clarity. Some agencies will also struggle with the requirement to pay their workers before reclaiming the money as furlough payments. This is a ridiculous scenario. You’re going to supply a means to pay workers when companies are struggling with no work and no income, but it only works if the companies have the means to pay those workers in the first place.
The furlough scheme has far bigger problems than this as well. Many companies will still have the ability to perform some work. Perhaps they can work to 50% capacity, but they can’t put people on 50% furlough. If you’re furloughed, that’s it, you can’t work for that company. A larger company might be able to furlough some and not others, but there’s no guarantee and this is likely to create resentment within their workforce.
Reduced hours is a very normal response to reduced cashflow within a company. It’s not great for workers, obviously, but at least when it happens to small numbers of companies the impact can be mitigated and there may be other jobs for those workers to go to. In the current climate that’s not possible. There will be many companies who would like to keep operating on reduced hours at the moment, but they can’t afford to. To do so would either mean drastic income reductions for staff, or unaffordable wages for people who aren’t operating at full capacity. There isn’t proper support for this scenario. We want our economy to be as strong as possible coming out of this, yet we’re imposing rules which encourage companies to completely shut up shop.
Our traditional rights to freedom and independence are rightly curtailed at this time. For how long remains uncertain, but we are faced with a scenario where government support is going to be superficial for a significant number of people and businesses. For most there simply isn’t an alternative, they can’t work, they can’t get a different job and access to Universal Credit is slow and complex and probably insufficient. There is always a trade off with government handouts. We want to prevent the undeserving from getting them. We are so terrified of someone undeserving getting support that we set things up in a way which means those who do need it face many hurdles.
All this to avoid that dreaded Universal Basic Income?
