Scots ‘furlough loophole’ funds public sector jobs
SCOTTISH ministers are encouraging taxpayer-funded bodies north of the border to take advantage of a loophole in Treasury rules to furlough public sector workers, it has emerged.
The UK Government has said its furlough scheme, which is designed to prevent widespread redundancies during the pandemic, should not usually be used by publicly funded bodies.
However, despite the Scottish Government receiving around £3.5billion in emergency funding from the Treasury, hundreds of public sector workers have been furloughed, leaving the UK Government to cover further costs.
Historic Environment Scotland, a public body that received around £40 million in Scottish Government funding last year, has placed around 900 staff on furlough. Sportscotland, the national agency for sport, which received around £35 million in public funding, will furlough a further 86 of its around 310 staff members.
Treasury rules state that the furlough scheme should not be used by bodies in receipt of continued public funding for staff costs. However, in guidance issued by SNP ministers, publicly funded bodies are told to “note that Scottish Government grants usually support activities and outcomes rather than specific staff costs”.
It adds: “We encourage all cultural organisations to consider whether an application to the Coronavirus Job Retention Scheme would be a way to mitigate some of the challenges.”
It is understood that some staff at the bodies believe the move is designed to shift responsibility for paying workers from Edinburgh to London. Donald Cameron, the finance spokesman for the Scottish Conservatives, said any public bodies using the scheme while continuing to receive funding to cover staffing were “clearly acting against the spirit and the letter of the scheme”.
He added: “It would be extremely serious if there is evidence to show that the Scottish Government might be encouraging any sort of ‘double dipping’ that is contrary to the rules.”
Historic Environment Scotland said commercial incomes had declined dramatically. The body received £38.6million in Scottish Government grants in 2018-19, and £44.8million from “charitable activities”. It spent £37million on staff salaries.
Sportscotland also said it had been unable to provide commercial services. It received around £6million for activities including course fees and venue
‘It would be extremely serious if there is evidence of encouraging any sort of “double dipping”’
hire, but the vast majority of funding was from the Scottish Government, which provided a £34.9million grant. It spent just under £9.5 million on wages. Most of the 86 staff furloughed were taken off work last week.
A spokesman for Historic Environment Scotland said: “We were advised by the Scottish Government, following discussions with HM Treasury, that public bodies which are only part funded from the public purse and which have lost some or all income from other sources … can consider furloughing staff.”
A Scottish Government spokesman said the Job Retention Scheme was “open to public bodies in Scotland and across the UK where public funding only forms part of their income stream and where they have experienced a reduction in other funding”.