Scrutiny questions "low level" of financial support

Wednesday 20 May 2020

Scrutiny has called on Policy & Resources to explain the rationale for the States' co-funding scheme, saying the "low level of support" is counterproductive and questioning why islanders are receiving less financial help than those in Jersey and the UK.

The Scrutiny Management Committee has discussed the States' payroll co-funding scheme and believes that there needs to be a more detailed rationale as to why the minimum wage has been chosen as the mechanism for the scheme.

Originally, the scheme allowed for employees to receive 80% of the minimum wage if furloughed or similar, with the employer making up the other 20%, if they could afford it.

That scheme has now been extended into new areas and expanded to 100% of minimum wage in some circumstances.

"It might arguably have been justifiable for Policy & Resources to start using the minimum wage as an initial yardstick for the co-payment scheme when the lockdown first started," Scrutiny President Chris Green. "But now that we know that the current situation will be subject to six distinct phases and may last into the final quarter of the year, we feel that there does need to be both a further rationale set out for using the minimum wage metric; and, secondly, there does need to be a review of it bearing in mind the minimum wage is set at a low level and is leaving many individuals and families short of cash."

Pictured: Paul Whitfield and Deputy Gavin St Pier are leading the civil service and political response to the corona virus pandemic. 

"We do note that both the UK and Jersey have more generous packages on offer for their workers in the same position, although the Isle of Man does have an even more restrictive scheme than Guernsey’s."

Scrutiny has previously done work on the issue of “in work” poverty and Deputy Green considers this as a follow up to that work stream.

"We have pursued questions with Policy & Resources on this which so far have not been answered. My view is that the co-payment scheme is best seen as a job retention scheme in order to help business and to prevent mass unemployment. Saving jobs, protecting businesses and helping families in need should be our clear goals at the moment, but we need to do that effectively.

"Generally, I don’t truly understand what the rationale is for the level of our funding versus the more generous schemes in Jersey and the UK. Would it not be administratively easier to ensure that people are earning a wage similar to their old wage- subject to a UK style cap – and therefore don’t potentially have to have recourse to the Hardship fund, which requires further admin. And should be for families who experience an emergency?

"It could also be said that Guernsey workers deserve at least as much as what Jersey workers get? Are we so different? What is the justification for the differential treatment? We need clarity on that."

Pictured: Deputy Green said P&R had not responded to his committee's questions.

Deputy Green said that forcing struggling small businesses to pay something when their business operations might be totally frozen "does not incentivise job retention" at a time when that should be the States' top priority.

"Further, what is the real rationale for providing such a low level of support at a time where it is imperative that islanders spend locally now and in the future? Reducing purchasing power down to the minimum wage – which itself is not a Living Wage, as the States has previously and repeatedly made clear – seems somewhat counterproductive. 

"I think the key point is that the financial support to individuals and businesses needs to be framed in the context of enabling a period of sustainable recovery. So the focus must be on supporting a 'V' shaped recovery bounce and sustainable businesses need support until they can reopen and this timing may vary."

Pictured top: Deputy Chris Green.