22 April, 2020
On 17 April 2020, the Department for Education issued helpful guidance on circumstances where education providers may be able to access the government's Coronavirus Job Retention Scheme ("CJRS"). Previously, the government made it clear that where schools receive public funding for staff costs (which is the case for most, other than independent schools), they are expected to continue to pay staff in the normal way and not furlough them. This raised the query among many providers as to whether the position was different if they had staff whose salaries are funded from income generated (rather than public funding). There was no specific guidance on this beyond the government stating that it may be "appropriate for some staff" where they are not primarily funded by the government and cannot be redeployed to assist with the coronavirus response.
The guidance now provides the following clarity on this issue.
These providers will continue to receive their budgets for the coming year in the normal way, regardless of any periods of partial or complete closure. As such they are expected to continue to pay their staff and not furlough them. However, where a school has:
the guidance confirms that it may be appropriate to furlough such staff provided certain condition are met. The conditions are as follows:
If all conditions are met, then schools can receive a grant from the CJRS which is in line with the proportion of its paybill which could be considered to have been funded by its total private income.
Where independent schools are funded by fee income paid by parents, they are able to access the CJRS and furlough staff (subject to meeting the standard conditions of the CJRS scheme). However, the guidance now confirms that if such schools do receive some public funding and that public funding is continuing (the guidance gives the example of funding received for looked after children placed by a local authority or local authority support for pupils with EHC plans) then the DfE expects independent schools to use that money to continue to pay those relevant staff in the usual way, not furlough them and not to seek support for them via the CJRS.
The position for these providers is similar to that of maintained schools/academies as outlined above. Where the provider continues to receive public funding either by grant; under a direct contract for services with ESFA; or through a funding agreement with the ESFA, the guidance is that they should not furlough staff where such funding is continuing. However, there is recognition that such providers rely on funding from a mix of income streams, both public sources and private income streams (such as fees, employer contributions and commercial income). The guidance confirms that where public income has reduced or non-public income has ceased or reduced, it may be appropriate for providers to seek support from the CJRS and to furlough staff, subject to the following conditions being met:
In relation to the last 3 conditions listed, the guidance acknowledges that it can be difficult to distinguish whether staff are funded through continuing public funding. In this scenario, providers should ensure that the total proportion of teaching and non-teaching staff (based on gross payroll) that are retained (i.e not furloughed) should, as a minimum, be equivalent to the continuing public income, as a proportion of all income that the provider usually receives.
As a word of warning, throughout the guidance the DfE makes it clear that it is considering appropriate measures to monitor the use of the CJRS in order to detect any duplication of funding, and will be considering potential options to recover misused public funding as required. Therefore, where a provider intends to access the scheme, we would strongly recommend that clear records are kept to show the rationale as to how you believe you meet the conditions for access to the scheme, in the event of challenge down the line.