After the government announced the extension of the its coronavirus Job Retention Scheme and other self-employed schemes until the end of March 2021, by and large business leaders from across the country welcomed the decision to provide firms and individuals with more assistance but expressed some concerns over its long-term effects.
Another business executive who was pleased to hear of the continued provision of the schemes was Albert Dravins, construction director at Middlesex-based Modebest Builders. Yet, much like others, Dravins does believe that the chancellor’s plan does come with its pitfalls.
However, Dravins’ reservation to the continuation of the initiative was more about how the scheme could potentially be abused, leaving businesses who rely on the services of the self-employed - such as Modebest - worse off.
Sharing his views with the Leaders Council, Dravins said: “While I agree with the government providing further assistance with the extension of furlough and self-employed schemes until next March, I am concerned that the system is being abused. Where the issue lies for us, is in the fact that we are experiencing labour shortages at the present time. While both our turnover and our labour requirement is greatly reduced, this may seem like a strange phenomenon.”
Dravins believes that the labour shortage within his business is being fuelled by the knock-on effect of the government’s support scheme for the self-employed, the conditions of which he feels are too lenient.
Dravins explained: “I am of the understanding that, if an individual is self-employed, they can apply for the assistance even if work is available to them. Once their application for support has then been approved, they receive up to £2,500 per month until March, and this is provided without any need to actively seek any work. Furthermore, once the application has been processed, you can leave the country and still receive the benefits.”
Dravins believes that these conditions for self-employed workers to receive support does not incentivise them to actively seek work and is only contributing to the labour shortages seen within his business and in the construction industry more broadly.
He said: “I have been informed that, and firmly believe, these conditions are why we are experiencing a shortage in services from the self-employed, and this is an issue the sector is going to have to get to grips with until the scheme ceases.”
While there may not be a clear solution for these issues, Dravins is of the mindset that ministers could look to engage in more open and regular consultation with operators in the industry and businesses in other sectors to come to a consensus on how best to alleviate the problem.
“I do not know how one can police the system to prevent these issues from arising. I do believe, however, that if the government seeks to engage in regular consultation with and garner feedback from other companies who avail the services of the self-employed, then we would be off to a promising start.”