Covid-19 Recovery Brief: Thursday, August 20

Each week, our Public Policy team will be reporting on the latest weekly news in the evolving situation. To view the previous week’s summary, please click here.

The second stage of the self-employed benefit scheme has been launched as reports suggest the Government is also trying to find a way to offer state-backed loans to companies owned by private equity groups

• The second stage of the self-employed benefit scheme was launched on Monday and it means that sole traders will now be able to claim up to £6,570 for lost income since 14 July after an earlier version of the scheme paid out £7.8bn to 2.7m people in May and June.
• Applicants for Self-Employment Income Support Scheme (SEISS) grants must prove their business has been adversely affected by Covid-19, such as individuals having to self-isolate or owing to supply chain interruptions.
• To qualify for support, individuals need to earn at least half of their income through self-employment, and have annual trading profits of no more than £50,000.
• It comes amidst reports that the Government is trying to find a way to offer state-backed loans to debt-laden companies owned by private equity groups, in the hope of rescuing a swath of the British high street.
• Private equity-backed companies typically carry high levels of debt to reduce their tax bill, resulting in statutory losses even when they are generating cash. Consequently, they have not been able to apply for emergency Covid-19 loans, since EU rules say companies whose losses exceed 50% of their share capital are ineligible for Government support.
• The Government wants to help private equity-backed groups that employ large numbers of people, such as PizzaExpress, Prezzo or Merlin, the owner of Legoland, without breaching EU state aid rules. However there is no guarantee that the Government will find a solution.
• Separately the Government has given banks extra time to grant 80% state-backed loans to medium-sized and larger businesses in an extension of Covid-19 support packages for the private sector.
• This pushes the final approvals date for applications for the coronavirus business interruption loan scheme (CBILS) to 30 November. The deadline for approving larger CLBILS has been set for 31 December.
• No extra time has been given for approvals of 100 per cent-state backed bounce back loans aimed at smaller businesses which are still due to end on 4 November as they were designed to be agreed by banks speedily, with minimal affordability checks.
• It comes as the British Business Bank has said that they have delivered over £52bn of loans to small businesses, including: £35.5bn Bounce Bank Loan Scheme, £13.7bn Covid-19 Interruption Loan Scheme, £3.5bn Covid-19 Larger Business Interruption Loan Scheme, £588m Future Fund.
• Overall, 1.23 million businesses in the UK have now been supported by lenders through government-backed Covid-19 lending schemes. Over 60,409 businesses have been approved for the CBILS. 516 larger businesses are now backed by the larger CLBILS. 1.17 million small and micro businesses have accessed a loan through the Bounce Back Loan Scheme (BBLS).

Pupils get record GCSE grades as BTec results are delayed

• The proportion of GCSE entries in England, Wales and Northern Ireland awarded top grades has hit a record high after a U-turn meant results could be based on teachers’ estimated grades rather than the algorithm which was initially used to calculate A-level result.
• Last Thursday there was anger after 40% of A-level grades were downgraded by exams regulators, this led to a U-turn by the UK and devolved Governments to instead base exam results primarily on teachers assessments.
• It comes as the exam board Pearson announced it would re-grade BTecs in line with GCSEs and A-levels. Which means some students will no longer receive BTec results today.
• Pearson’s decision affects about 500,000 pupils, 250,000 of whom received their A-level equivalent qualifications last week.
• Schools Minister Nick Gibb has said that he is hopeful BTec results will likely be released next week.
• More than one in four GCSE entries in England scored one of the three top grades this year, up from just over a fifth last summer, figures from the exams regulator Ofqual show.

Other news

• The Government is considering removing from Croatia from its “safe list” of countries as early as today. It follows a significant rise in the number of cases in Croatia – the 14-day cumulative number is 37.7 per 100,000, compared to 21 in the UK.
• Around one in eight of the UK workforce remain on furlough ahead of the winding down of the job retention programme. The Office for National Statistics (ONS) also said that 10% of surveyed businesses warned they have a “moderate” risk of insolvency, with 1% of firms saying the risk was “severe”.
• Health Secretary Matt Hancock has launched a new organisation, the National Institute for Health Protection (NIHP), which will be temporarily led by Baroness Dido Harding. The organisation will focus on protecting people from external threats to the country’s health, including pandemics and biological weapons. It will bring together Public Health England (PHE), NHS Test and Trace and the Joint Biosecurity Centre.
• The NHS is preparing to spend up to £10 billion in private hospitals over four years in an effort to bring waiting lists down. The figure emerged in a contract notice amid growing concerns about what delays in cancer diagnosis and treatment will mean for patients.
• Heathrow Airport will offer a £150, 90-second Covid-19 test to passengers arriving from virus hotspots from this week. Passengers must then take a follow-up test at home five to eight days later.
• The Government has announced an expansion in the Office for National Statistics infection survey from 28,000 people per fortnight to 150,000 by October. The ONS study will provide a national picture of how the virus is spreading as well as granular estimates of the number of cases at a local level
• The temporary release of low risk prisoners will be “paused at the end of August”, the Ministry of Justice has confirmed. The steps were taken as part of the wider strategy to protect the NHS and to reduce the virus’ impact on the prison estate.
• On Wednesday some restrictions in Leicester were relaxed. Outdoor pools and various beauty settings can reopen. Restrictions on gatherings in private homes and gardens remain in place.
• The Scottish government has produced sector specific guidance to ensure workplaces are safe.

• The Scottish government has launched  a £15 million ‘Connecting Scotland programme’ which will help around 23,000 low income households without proper internet access  to get online. These families will get a device, 12 months unlimited data as well as technical support to get online safely and securely.
• The Scottish government has announced £7 million towards upgrading transport to mitigate against COVID-19. The newly created Public, School and Community Transport COVID-19 Mitigation Fund could include measures such as driver screens, hand sanitiser dispensing, high-performance air conditioning units or disinfectant fogging equipment.
• UK Finance found that consumers paid down credit card bills during lockdown. Outstanding balances on credit cards contracted by 12.6% in the year to May, and the continued uncertainty caused card transactions down 39% compared to last year.
• Britain ‘Eat Out to Help Out’ scheme has seen over 35 million meals claimed in the first two weeks of the scheme. Over 48,000 claims have been made by some of the 85,000 restaurants taking part in the scheme.
• Those working from home or in the workplace with a disability will benefit from extra help through an extension of the Access to Work scheme. The funding can be used for: special equipment, such as a screen reader, video remote interpreting or support worker services; taxi fares, if public transport is not currently a safe option; or mental health support.
• The Scottish Government has announced a new support package worth £3.8 million to protect jobs and assist the re-opening of iconic heritage sites closed during the pandemic has been announced. The funding will be made available to the National Trust for Scotland (NTS) to aid the heritage organisation’s recovery from the impacts of COVID-19.
• Welsh Ministers have  unveiled a multi-million-pound support package for local authorities. The funding boost of over £260 million will support local councils in planning for the remainder of the year. It is intended to help cover increased costs, manage loss of income pressures, and will fund additional cleaning requirements for schools in response to the Covid-19 crisis.
• Property sales are up by 20% and average asking prices have risen by £10,000 in the four weeks since a cut in stamp duty, according to Bank of England data.