Watch the webinar
Today's webinar took the form of a conversation between the CBI’s own Chief Economist, Rain Newton Smith; the Principal and CEO of Leicester College, Verity Hancock; and the Transformation Director of the housing and care company EMH Group, Phil Davidson. Here are the main subjects they covered:
- The latest developments
- The economic outlook
- Planning for future lockdowns
- Local lockdowns: who is in charge?
- Future support schemes.
The latest developments
After our last webinar, on Friday, Boris Johnson delivered a statement on the next stages of the country’s “return to normality”. Rain began her remarks today by describing this as “quite a big moment”.
Among the statement’s provisions, as Rain explained, were a new target for testing, new powers for local authorities to contain local outbreaks, and different advice on returning to work from 1 August.
It’s the advice on returning that work that has garnered the most attention in the days since. Instead of advising those who can work from home to continue working from home, the government is giving office-based businesses greater discretion to determine how and when they use their workplaces.
Rain agreed that “businesses themselves are best placed to know the needs of their employees and their challenges” – but she doesn’t anticipate that there’s “going to be a rush” of office workers returning on 1 August. “How do you handle the confidence issue?” she asked.
There are other specific issues in the way of widescale return. “One of the biggest challenges,” said Rain, “is public transport” – both employees and employers “will be taking on some risk going on to public transport if the right protections aren’t in place”.
Another is schooling and childcare. “Looking to the autumn, we do have some concern about the viability of nurseries,” warned Rain.
However, it’s clearly important for the functioning of the economy to have people back in their offices. As Rain revealed, “We’ve had some of our members say that they look out [on to city centres] and there’s no one there, but there are lots of shops and cafes that are open.”
The economic outlook
Last week also delivered the latest GDP figures – a 1.8% rise in May, but still some 24.5% lower than in February – as well as a new set of economic scenarios from the Office for Budget Responsibility (OBR), the independent fiscal watchdog that does the sums for the government.
Rain outlined the OBR’s “best-case” scenario: “The economy gets back to the size it was [in] the first quarter of next year.” But she added that, as befits a best-case scenario, this “still feels pretty optimistic to me”.
In which case, the “central scenario” is probably more realistic: “[the economy] doesn’t come back to its pre-crisis peak until the end of 2020.” And there was also a downside scenario: “…some time in 2024.”
Rain did put this into context, however: “After the global financial crisis, it took about a decade for living standards to return to where they were.”
“It all comes down to consumer confidence,” she added – and, on that front, there are some positive signs. For example, there was a 12 per cent increase in “retail sales volumes” in May.
Planning for future lockdowns
Verity described the heart-rending process that Leicester College has been through: they were set to reopen in late June and early July; they opened for a week, primarily to deal with those students who still needed to complete practical assessments; “everyone was excited” – and then, “we needed to shut again”.
It’s not all bad news, however. Verity revealed that “we’ve been told that we can reopen from next Friday, along with schools”.
But the process of reopening, closing and reopening again has certainly created challenges. It’s now the middle of the summer, when staff are taking contractual holiday time, so there’s only so much teaching that can be done. “We’re going to try and carry on with our arrangements for full reopening at the end of August,” said Verity.
“It’s going to be a very different experience” for students in August, she continued. “At least, I’d say, 50 per cent online.” The requirements of social distancing will mean fewer social areas and occasions, new one-way systems and challenges around dining.
And what if there’s another lockdown in Leicester? “We’ve got a Plan B, C, D and E now,” said Verity. “The only thing you can do is scenario plan.”
Local lockdowns: who is in charge?
Phil began his remarks by observing that “life was much simpler when it was a national lockdown” – and this quickly became a major theme of the conversation.
His point was that, under the national lockdown, there were clear rules and guidelines in place. But now, in Leicester, “it’s actually been very difficult to understand with any certainty what we should be doing in the local lockdown area”.
In fact, Phil suggested that this problem could get worse as more powers are handed to local authorities – and information becomes “harder to access” on non-centralised websites.
When asked what lessons should be learnt from the Leicester lockdown, Verity added her support to Phil’s message: “[The government has] got to decide and be really clear: who is in charge?”
And Phil added that even the language around local lockdowns has been unhelpful: “The use of [words] like ‘advisory’… causes a lot of confusion about what [businesses] can do locally and what they can do locally.”
“It either is a lockdown or it isn’t a lockdown.”
Future support schemes
What happens to businesses that have to go back into lockdown? What support can they rely on? Verity revealed that, while most of Leicester College’s staff are still working, they have “re-furloughed” those who cannot currently work, such as facilities and catering staff. “That has worked really smoothly, I must say.”
However, as Rain explained, the option of re-furloughing staff won’t last forever. Not only is the government’s Job Retention Scheme (JRS) becoming progressively less generous until its termination at the end of October, but it’s also the case that “you can only claim… if you’ve furloughed that employee at some point before 1 July.”
Verity went on to describe the very particular challenges that the college sector will face in the months ahead. “We’ve got one set of staff… but two sets of students now”; those who still need to finish their courses and those who are starting in autumn. “I’ve asked the government what help will be available… but so far I haven’t had an answer.”
What could the government do to help specific areas, sectors or businesses? Rain said that the CBI would welcome a localised form of the JRS, but that there’s much more to be done – not least because “businesses have many costs other than just what they pay their employees”.
“We’d like to see more grant support… and we’d like the government to consider a Business Rates holiday.”
Key questions we answered:
- Verity, what is happening in Leicester and at Leicester College?
- Leicester is back into lockdown, and it is a serious lockdown. The college falls well within the lockdown zone.
- We had been reopened for a week. The staff were excited and morale was raised, but within a week we had to shut everything down again.
- The whole point of a further education college like ours is to deliver practical, vocational education. So, there is a limit to what we can do remotely.
- Verity, what do you think will happen next?
- Along with schools, we can reopen from next Friday.
- We’re going to carry on preparing for a full reopening at the end of August. We will also need to prepare for the enrolment of thousands of students that will come at the end of August.
- I am sure that most 16-18-year olds will turn up as they need to for their education.
- But it is going to be a different experience, and I suspect that about 50% of our work will stay online. It is also worth considering those students who do not have a firm grasp of English will have difficulty learning online.
- However, we want to give our students a special vocational experience, so it is challenging.
- Even with all the stringent safety measures we have implemented, we won’t know how confident our staff and students will be to come back until we are in full swing.
- Phil, what has your experience been in dealing with this lockdown?
- Life was a lot simpler when it was a national lockdown.
- It is hard to understand fully what we are supposed to be doing in a localised lockdown.
- Psychologically, the impact on our staff has been tangible.
- Some staff who may live outside of Leicester may be able to operate more freely than them while they are locked down.
- Phil, who are you taking your lead from when it comes to the Covid alert levels?
- Our role is to try and translate the messages that government provide.
- At the start there was a lot of clarity on what needed to be done. There has been a lack of clear direction since.
- For example, we now issue face masks to staff, but it would have been useful to have been told that they would have been compulsory back in March.
- We are trying to deliver our services as normally as possible, but the lack of clarity has made it difficult.
- Verity and Phil, once a local lockdown happens, what happens to staff? Do they go back onto the furlough scheme?
- Verity – Most of our staff are working or on contractual leave. Those who can’t – e.g. all our catering staff – we have re-furloughed. We need all the help cash-wise we can get.
- Phil – We have been reducing the number of staff on furlough prior to the Leicester lockdown. The majority are still able to work, but the hardest problem is social distancing and apprentices. The majority who remain furloughed are apprentices as they cannot get close with operatives.
- Verity and Phil, what are the key lessons from the Leicester lockdown?
- Verity – You must decide who is in charge of the lockdown. Is the local authority in charge? What is the role of the local enterprise partnership? Who controls the money to help businesses adapt during this lockdown?
- Phil – Where the decisions lie is where consistency is needed. Also, give clear directions. Phrases like “advisory travel” are not helpful. Either it is a lockdown, or it isn’t a lockdown. Vague words only cause confusion. There have also been mixed messages between national and local government.
- Phil, on transport, what is your advice to those who live outside of Leicester?
- We tell them to work from home if they can, and we have invested in technology to make that possible.
- We were able to mobilise another 400 staff to be able to do that.
- Now we are looking at what is needed to help staff work in a fully mobile way.
- Verity, what are you doing in terms of classrooms and masks/social distancing?
- We are planning on the basis of one metre distancing. We will minimise the number of people on site as many are content with material being distributed online.
- The student experience is going to be diminished, which is a shame. Their social spaces will be restricted.
- There are one-way systems in our buildings. Nothing is as important as the health and safety of our students and staff.
- Everything is being looked at in incredible detail. It is the most unbelievable logistical challenge.