LAYING OFF - A SCAFFOLDING DISASTER

A recent survey has revealed one third of UK firms could lay off 75-100% of staff because of economic concerns over the coronavirus crisis. This follows on from our own survey, showing 72% of scaffolding employees had been furloughed with the remainder laid off. So why, in the light of the government scheme, have so many chosen to take a different route as the virus reaches its peak? Grahame Anderson has more

GOVERNMENT INTERVENTION

The Chancellor Rishi Sunak has stated that the government is happy to pay 80% of the wages of furloughed staff, up to £2,500 each month, while the crisis continues. This relatively generous offer was warmly welcomed by many, though it seems there has been a problem getting that cash to those on the ground quickly. And of course, we should also remember some construction sites have so far remained open for business despite social distancing fears.

Indeed, the Health and Safety Executive has warned employers that if they don't stick to the social distancing guidelines, they could have sites suspended and face fines.

North of the border, the Scottish Government stated in a guidance note that the construction sector and its supply chain is “considered a non-essential business sector”, except when supporting essential types of work.

SAFEGUARDING THE FUTURE

Construction company Mace Group has already furloughed 800 staff - Chief Executive Mark Reynolds said: “What the furlough scheme has enabled us to do is keep the capacity and capability within our business so that when we come through this, we can then re-deploy our people immediately so we can go back to work.”

A major benefit of the furlough scheme is employees have the assurance and security of knowing they have jobs to come back to. When it comes to experienced workers, much like those in the scaffolding industry, this can also reduce hiring needs going forward. In fact, some firms use this type of plan on a regular basis.

WHY LAY OFF?

So why choose to lay people off? Perhaps the biggest reason lies in the fact some firms simply can't wait for the money to come through. Cash-flow is all-important with some companies in the industry and there are a number of firms with less than a month's cash-flow in reserve. Given this, it seems a number of organisations have opted to try and save money by laying off staff in the hope they can recruit again when the market turns. However, this in itself could have serious long-term repercussions. While it makes sense, given the government's scheme to utilise the help already available, there is always the site safety issue to consider.

In light of all this, a new phrase has been doing the rounds in the scaffolding industry as Robert Candy, Chief Executive of the Scaffolding Association, explains: “People before profit is a phrase we are hearing more and more regularly as the effects of COVID-19 tear through our industry. This shouldn’t be something we have to advocate, it shouldn’t even be a consideration, we should be ensuring that we protect our people. The people that our industry will need in the future when the time comes for us to operate without the current measures we are having to adhere to.”

National Access and Scaffolding Confederation (NASC) Managing Director Robert James added: “We have made considerable efforts to speak with scaffolding contractors of all shapes and sizes to better understand the challenges they are currently facing.”

The Health and Safety Executive have said: “Firms that can safely stay open and support livelihoods should not be forced to close by misunderstandings about government guidance.”

EXTENDED LOAN SCHEME

The good news is the government has extended the Coronavirus Business Interruption Loan Scheme introduced in March of this year. It means all viable small businesses, including those in the scaffolding industry affected by COVID-19, will be eligible should they need financial help to keep operating during the current crisis.

The scheme offers support to small and medium-sized businesses with an annual turnover of up to £45 million. It includes access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years.

Those unfortunate enough to be laid off with no guarantee of returning to a job can apply for universal credit – but is this the right way to treat employees at a crucial time for the industry?

STAYING STRONG

Even at the time of writing, the situation for some is changing by the day – the industry can only hope laying off workers has reached its plateau, as more and more firms make use of government help. In general terms the recovery of the economy once these dark days are over will still be a slow and often painful process. The scaffolding industry needs to ensure its highly skilled workers are protected as much as possible.