Coronavirus - How Does the Job Retention Scheme Apply to GPs?
As the Government continues to respond to the ongoing challenges presented by the coronavirus (COVID-19) pandemic, the guidance for employers on managing the workforce and dealing with the financial pressures resulting from the virus continues to develop.
Nevertheless, whilst much of the guidance in this area is understandably fast-moving, one aspect which has remained consistent since the earliest iterations of Government guidance were published is the Government's stance on use of the Coronavirus Job Retention Scheme (the "Scheme") in the public sector.
What Is the Coronavirus Job Retention Scheme?
The Scheme, which has been highly publicised, is part of a suite of temporary measures put in place by the Government to alleviate some of the financial pressures faced by employers and staff alike as a result of the coronavirus crisis. The Scheme has introduced the concept of 'furloughing' staff where they are otherwise not needed as a result of coronavirus and is intended to enable staff to remain on the payroll and in receipt of income where they may otherwise be laid off, or redundant due to the pandemic. Under the Scheme, furloughed staff cannot provide services to or make money for their employer during the furlough period, but will be retained on the payroll and the Government has committed to paying furloughed staff 80% of their usual salary, up to £2,500 per month.
The Scheme offers reimbursement of wages, as opposed to direct payments to staff. This means that those organisations utilising the Scheme to furlough staff are required to pay staffing costs through payroll in the usual way (subject to any pay adjustments) and then make a claim to HMRC for reimbursement using an online portal which opened on 20 April 2020. The Scheme covers the period from 1 March 2020 and has now been extended to run until October. Although it is likely that there will be some changes to the operation of the Scheme between now and October, with employers likely being asked to carry some of the costs burden towards the end of the Scheme.
Considerable guidance has been published in relation to the Scheme and it continues to develop. However, the position has remained consistent as regards the availability of the Scheme to public sector organisations and those already in receipt of public funding. The Government guidance on the Scheme includes a dedicated section on the application of the Scheme to public sector organisations.
It states that:
"the government expects that the scheme will not be used by many public sector organisations, as most public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak. Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them. This also applies to non-public sector employers who receive public funding for staff costs.' In addition, it provides that 'organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff."
Accordingly, it is clear that where staffing costs are covered by public funding, it will not be appropriate to utilise the Scheme to furlough these staff and seek to recover their pay. It is not expected that this position will change.
Notwithstanding the above, the guidance indicates that organisations in receipt of public funding to cover staffing costs are not necessarily precluded from utilising the Scheme entirely. The guidance recognises that, in limited cases, furlough may be appropriate. It states that "in a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff."
What Could This Mean for Your Practice?
What this means in practice is that it may be possible for some staff within an organisation in receipt of public funding to be furloughed, subject to specific criteria being met. Whilst the guidance is silent as to the circumstances where furlough may be appropriate, it is clear that it would only be appropriate where funding is not primarily from the Government. Therefore, the first action for practices considering furlough will be to assess whether the roles are covered by public funding, and if not, practices should be prepared to evidence this. For instance, demonstrating that public funding has been reduced or has ceased.
Where practices can evidence that the affected role is not primarily publicly funded, the guidance is clear that furlough will still only be appropriate where there are no alternatives to furlough. Therefore, consideration should also be given to whether there are any alternatives to furlough, such as redeployment, or reduction in working hours.
Where staffing costs are not covered by public funding and there are no alternatives to furlough, practices would be advised to collate appropriate evidence to support furlough applications as we anticipate that applications will receive some scrutiny from HMRC before any reimbursements are granted. Indeed, it is also important to note that should an application be successful, and monies reimbursed, HMRC has the power to review and there is potential for HMRC to recover sums from the employer at a later date.
It is worth noting that the BMA has issued guidance on furloughing, which notes the key to accessing the Scheme is funding, and further sets out the view that "As a general rule, if the funding that is used to employ staff members is maintained, as is the case for GMS funding for general practice, the furlough will not be permitted. Where funding has been reduced or halted, and there is a direct impact on the employment of staff, then practices may be able to furlough their staff."
Summary
Whilst furlough may not be appropriate for most GP practices, we anticipate that further guidance will be provided by NHS England in due course in relation to reimbursement of additional costs incurred by practices as a result of COVID-19. It is thought that this may extend to cover additional staffing costs.
A key point to bear in mind is that the Scheme operates to reimburse monies, and therefore if staff are furloughed and a determination is made that the employer cannot use the scheme, it will not reimburse the money. In addition, HMRC has the power to later review and recover any sums that should not have been reimbursed. Therefore, where there is a query over the use of the Scheme, an alternative option may be to think how best to utilise the workforce, including consideration of redeployed, restructuring and reducing hours.