The government’s furlough scheme has been the life raft that has kept many businesses afloat throughout the pandemic. RfM accountants have seen first-hand how it has benefitted many of their clients. However, Paul Newsham, partner at RfM Accountants, argues that there should be an extension to the £1,000 reward the government is paying companies per each employee they return from furlough. Why, he asks, should organisations like his, who have turned down the furlough option and kept staff employed, receive no reward or recognition at all?
When lockdown was announced on the 23rd March, my colleagues and I had very little time to think about our own business. Instead we effectively found ourselves thrust into the role of being a conduit for the government. Being a chartered accountant with offices throughout the North West, and with more than 4,000 clients, we were inundated with calls and emails from other businesses seeking advice.
My team responded in the way we always do when called upon. We were there for our clients. As soon as anything new was announced by the government, we broke it down and passed on the relevant information to the people that needed it. From the furlough scheme to the bounce back loan, we walked a range of clients through the full details and let them know the options that were open to them. Where possible we allayed their fears and gave the solid, reliable assistance they needed.
As we were undertaking this work, we were well aware that, with the dark cloud of a significant recession on the horizon, it was quite possible that many of our clients would not be able to pay us for the work provided. But we knew that we could make the difference between some of these companies staying afloat or going under and there was no way we were going to abandon them in their moment of greatest need. In fact, we specifically prioritised the clients from whom we were least likely to see payment. These clients, the ones in most peril, were after all the very people who needed us most.
On top of that, we undertook a great deal of work for which, given the circumstances, we simply couldn’t charge. Hours were spent on the phone offering reassurance. Hours were spent working our way through the government’s new website only to see it crash because of overwhelming demand. There was no way, in good conscience, that we could bill our clients for this so we simply bore the cost ourselves.
All of this meant that, while we were advising other businesses on how to take advantage of the furlough scheme, there was no way we could make use of the scheme ourselves because we needed our full workforce to have all hands on deck helping our clients. This wasn’t a decision based on our own bottom line or turnover. As discussed above, we were doing a great deal of work for free and we were doing the rest with no guarantee of payment. I know there are other chartered accountants who decided to furlough their whole staff and, if we only cared about our own self interest, this may well have been the best course to take. But we chose to be there for our clients and it’s a choice we would make again without hesitation.
It’s for this reason that I believe the government’s decision to reward companies £1,000 for each employee they successfully return from furlough should also be applied to companies like mine who kept fifty employees working full time throughout the pandemic. We chose not to furlough our staff so that we could help other firms to furlough theirs, and it makes no sense for us to be excluded from this reward.
I want to be clear that I don’t make this point as a criticism of the government. Under intense pressure, they had to rush through complex schemes involving billions of pounds. I know from our many clients how vital the furlough scheme was and how many companies were saved from the abyss as a result. We ourselves have also taken advantage of the bounce back loan, which has been a great help but which, unlike the furlough money, will have to be repaid.
One of the principles of the coronavirus business interruption loan scheme (CBILS) was that it would only be lent to businesses whose viability had been proven prior to the pandemic. And yet, the reality of the furlough scheme is that, in a notable minority of cases, this money has been used to prop up jobs and businesses who will disappear shortly after the scheme ends. This £1,000 incentive will mean that some companies will bring their employees back from furlough, keep them on until the end of January, receive their £1,000 reward and then let them go.
Again, I don’t wish this to come across as a criticism. I fully understand that there were always going to be flaws in a scheme that, out of necessity, rushed through so quickly. I simply believe there should be more recognition of the organisations who have kept going when it would have been far easier to take six months off and take the furlough money.
We have in effect been performing a public service while turning down public money. I think it is only right for this to be recognised.
