Chancellor announced additional support for businesses

The Chancellor Rishi Sunak announced today an expansion of the Job Support Scheme (JSS) and other new grant schemes for businesses in Tier Two areas. 

Rishi SunakHe has made two changes to the JSS for businesses that can remain open:

  • The number of hours a worker must work to be eligible for the JSS has been reduced from a third to 20%
  • The employer’s contribution to the remaining wages has been cut from 33% to 5%. 

The government will provide up to 62% of the wages for hours not worked, up to £1541.75 per month, and employees will take home at least 73% of pay for working 20% of their hours. The JSS will be open to all businesses that can demonstrate an impact on revenues, regardless of which alert tier they are in.

The Chancellor also announced a new grant scheme for businesses in Tier Two areas that have been severely restricted by government measures but have not been legally forced to close. The grants are worth up to £2,100 per month and are primarily aimed at businesses in the hospitality and leisure sectors. 

Businesses in very high alert level areas will qualify for greater support, whether closed or open, up to £3,000 per month. 

Local authorities will also receive a 5% top up amount to their implied grant amounts to cover other businesses that might be affected by the local restrictions

Purnima Tanuku OBE, Chief Executive of NDNA said:

“When the Job Security Scheme was announced it was clear that it was less generous than existing furlough arrangements and so would provide limited support to employers. Boosting that support can only help protect jobs across the sector.

“It’s clear the hospitality and retail sectors need support but it’s disappointing that there is still no specific financial support for nurseries - which are an essential part of our economic recovery in enabling parents to work. 

“Nurseries and childcare providers have worked hard to give children positive and engaging learning environments at a hugely challenging time. They are facing the double whammy of higher operating costs, due to safety measures they have put in place, and reduced income.

“The Government should recognise this and make support funding available. NDNA will be writing to all local authorities to encourage them to use their top-up funding to assist childcare businesses and thereby ensure there are sufficient early education places for young children.”

Grants will be distributed by local authorities and will be backdated to August for businesses that have been under enhanced restrictions since then. 

It will be up to local authorities to determine which businesses are eligible for top up grant funding in their local areas, and what precise funding to allocate to each business.

The government will also expand the Self-Employment Income Support Scheme to support self-employed people experiencing reduced demand due to Covid-19. The expansion increases the amount of profits covered by the two forthcoming self-employment grants from 20% to 40%, meaning the maximum grant will increase from £1,875 to £3,750.