Over 2,000 made redundant at largest 20 charities despite high use of furlough

08 Apr 2021 News

Between them the largest 20 charities have made over 2,200 redundancies in the course of the Covid-19 pandemic, despite high uptake of the furlough scheme saving many roles.

Civil Society News surveyed the largest 20 charities that feature in the 2020 Charity Finance 100 Index, which ranks charities according to their average income over a three-year period. 

Of the largest 20 charities, 15 supplied some details of their use of the furlough scheme over the pandemic period, and one other had reported some information in a previous survey.

They reported more than 32,500 instances of furlough, and Civil Society News estimates that more than a third of these people remained on furlough at the time the research was undertaken in March.

In total this marks a rise of around 8,000 furlough instances since May 2020. Last year, the largest 20 charities reported furloughing 24,604 staff.

Charities also report that they are making use of the flexibility that was introduced in the later iterations of the scheme.   

High levels of furlough 

At its highest use, The National Trust reported furloughing the most people. At one point around 80% of its workforce were on the job retention scheme, amounting to around 11,000 people.

Currently, almost 70% of Oxfam staff are on full or part-time furlough. Its most recent accounts reported 4,684  staff, which would equate to around 3,278 roles. However, this number is likely to be less as there has been a reduction in headcount.

At the Salvation Army, 575 staff are on furlough, with 443 furloughed full time and 132 flexi-furloughed.

Gill Staunton, head of people operations at the British Heart Foundation (BHF), said: “Until recently there were approximately 3,000 staff, 80%, taking part in the job retention scheme at the BHF. This is mainly due to the closure of non-essential retail across the UK during the multiple lockdowns which has led to several periods of closure for our 730 shops.”  

Based on the March claim Barnardo’s said it currently has about 1,750 people furloughed and said 2,900 people have been furloughed at least once.

The British Red Cross Society currently has 888 staff on furlough and since the beginning of the pandemic, it has put 2335 on the scheme. 

Mencap reported that in March 2021, there were 337 people on furlough for all their hours and 20 on part-time furlough.

It stated: “The primary reason for those colleagues still on furlough is related to shielding, including many support workers who are in a high-risk group and should not work in frontline support services. We have continued to top up all furloughed colleague’s salaries to 100% pay to make sure no one loses out financially during the pandemic. 

“The number of colleagues on furlough will be decreasing steadily from the 1 April when shielding ends and many shielding colleagues are supported back to work, and when our retail outlets reopen, which we anticipate will be from the 12 April.”

The RNLI’s use of furlough has reduced as restrictions eased. From a peak of 717 staff members being on furlough in May 2020, the number of staff on furlough has gradually reduced with the majority of furloughed teams and staff returning in the second half of 2020.

The Canal and River Trust had 126 people furloughed to some extent in February – equating to £128,462.71 claimed. The number has reduced during March. 

At its peak in spring 2020, around a third of the Canal Trust’s 1,600 employees were on furlough. The Trust is likely to see a reduction in income of around £15m this financial year as a result of the pandemic. 

St Andrew’s Healthcare, a mental healthcare hospital, reported that no one was furloughed.

Redundancies: Furlough measures not enough to weather the crisis

Only a small number of the largest 20 charities supplied figures on the number of redundancies made, which totalled more than 2,200.

Nonetheless, others reported that they were going through redundancy consultations or had already made some redundancies, meaning the number is likely to be significantly higher. 

Of 15 responses, 11 reported they had made redundancies, three had not made any, and one charity was currently in consultation with staff. 

The National Trust made 1,458 redundancies as a result of the effects of the Covid-19 pandemic. The charity said: “We used the government’s scheme to support us through the immediate effects of the crisis and protect jobs while our places are closed and staff aren’t needed. We’d have made more redundancies, much earlier, due to the fall-off in trading income, had there been no furlough scheme.”

Macmillan Cancer Support, which has furloughed, 809 staff since the beginning of the scheme, has made 260 employees redundant in the last year as part of changes to help Macmillan mitigate a significant drop in income.

The cancer charity said: “We were able to make significant cost-savings by furloughing approximately 30% of the workforce during the initial stages of the pandemic. But despite this and considerable efforts to combat the drop in funding through a range of other measures over the course of the pandemic, Macmillan was unable to avoid cuts to jobs.”

Staunton, at the BHF, said the charity has taken numerous steps to mitigate the costs of the crisis but “these measures were not enough to weather the crisis”.

She said: “Following a consultation process, we took the difficult decision to make some redundancies. As a result, we now have 300 fewer roles in terms of headcount. The majority were reduced by unfilled vacancies and around 45 roles were compulsory redundant following a collective consultation process.  

“The support provided by the furlough scheme has certainly helped mitigate the need to make more redundancies given the lengthy closures of retail throughout the year.”

Barnardo’s stated that before the pandemic it was already undertaking a cost efficiency programme and identifying areas where savings could be made, “which unfortunately also included a reduction in jobs in some areas”. 

It said: “We have therefore continued to make redundancies where we have needed to reduce operating expenditure but this has not all been as a direct result of the pandemic. The scheme has provided us with the time to properly assess and evaluate the most appropriate ways we can help ensure financial sustainability. Due to the loss of income by the charity because of the pandemic, the scale of those cuts and associated redundancies would have been greater without the scheme.”

Similarly, Marie Stopes International reported that redundancies were made at the end of 2020, however, the number may have been higher without the use of the furlough scheme.

‘The furlough scheme has been incredibly valuable’

Many charities reported that the furlough scheme was crucial to reducing income losses and reducing the need to make redundancies.

A National Trust spokesperson said: “The coronavirus crisis has been exceptional. Financial risk may be modelled on a recession, temporary closure, or declines in membership but it is quite unprecedented to have all of those factors at once.  The government’s furlough scheme has helped to stabilise the National Trust’s finances, saving many jobs. Without the support of the furlough scheme, alongside grants, loans and in-year savings, the number of redundancies proposed would have been much higher and we would have had to make redundancies much sooner.”

The RNLI described the furlough scheme as “incredibly valuable” as the impact of government restrictions meant the RNLI was required to cease core areas of activity “like manufacturing and refitting our lifeboats, shutting down the RNLI College for training and hospitality, closing our shops and pausing fundraising events and activity.”  

It said: “As a result, a significant number of roles were directly impacted and became unable to function under these restrictions. Being able to accept furlough and wage subsidy support (Republic of Ireland) ensured we could retain the staff in these roles while enabling us to maintain our lifesaving service.”

Mencap echoed this sentiment, and said: “The furlough scheme has been a huge help to the charity during a time when we have faced significant new financial costs to continue delivering our vital work, for example, adapting our programmes to be able to deliver these virtually.”

The British Red Cross, which has furloughed 2,335 in total, said it redeployed staff wherever possible, but “where that’s not been possible, or where people’s personal circumstances have required, the furlough scheme has helped us to retain trained, experienced staff through this period”.

It added: “It’s enabled us to flex as lockdown guidelines evolved. For example, we were able to reopen our shops for a time, before the latest lockdown. We are now preparing to reopen our shops again which will reduce the number of staff we currently have furloughed.”

Barnardo’s also cited the furlough scheme as being “very helpful” against the backdrop of around £65m gross income reduction.

The charity said the scheme provided “a little breathing space” to properly assess its expenditure and give staff the opportunity to balance multiple demands of home and work. 

It added: “The income of a little more than £14m has been welcome, and we are grateful for the scheme in enabling the preservation of roles and helping us to maintain the delivery of crucial services to children, young people and their families.”

The Salvation Army described the furlough scheme as “a lifeline for the charity” which supported it to keep people in employment but also ensured funding could be prioritised for its frontline work. 

It said the savings through the furlough scheme have helped towards covering essential costs, “throughout the pandemic our officers, employees and volunteers have been feeding struggling families through our food banks, cooking hot meals for rough sleepers and providing doorstep friendship for older isolated people. To keep everyone safe we have been faced with huge increased costs, including spending more than £20,000 per week on PPE.” 

Oxfam added that the pandemic has had a significant impact with the closure of its shops during the lockdowns and cancellation of major fundraising events. A spokesperson said the furlough scheme, along with a restructure to reduce costs by £16m, “has helped us mitigate the impact of the loss of income while we have done everything we can to protect our work globally”.  

Charities adapted use of the furlough scheme over the pandemic 

Many charities found that they were able to adapt their furlough use as the scheme became more flexible.

CAF, which has furloughed 10 staff, said it made use of the flexi-furlough opportunity for a number of people “which has been of benefit for the business and for the individuals concerned”.  It added this has also helped to support those who have been required to shield and are not able to work from home.

Mencap suggested shielding was the main reason for furlough. “Initially, furlough was used for both colleagues who couldn’t undertake their work from home and those who were asked to shield. However, over time we have been able to adapt to deliver some of our work virtually including our programmes and some support services. Now, the primary reason for those colleagues still on furlough is related to shielding.”

Other charities reported that flexi-furlough had been useful for staff with child, or other care, commitments.

The British Red Cross said: “Flexible furlough has helped staff who faced with juggling childcare and work commitments during the school closures and has also been a great support for those easing back into work who have had Covid-19 and are now experiencing the impact of long Covid symptoms.”  

Macmillan Cancer Support added that since February, it has been able to offer flexible furlough to members of staff struggling to juggle childcare and work responsibilities.

An Oxfam spokesperson said: “The introduction of the part-time and short-term furlough options have enabled us to be flexible and allow more staff to be involved as we adapt to changing business needs like the re-opening of our shops and reflect people’s personal circumstances - for example, staff with increased caring responsibilities during lockdown.”

Staunton at the BHF noted furlough had been used depending on rules in different locations. She said: “We have used the scheme more flexibly during the later stages of the pandemic to enable the colleagues based in retail in the different nations to come back and prepare for re-opening based on the rules in each location.  

“The different dates and details in each of the devolved nations has made this a considerable and complex challenge for an organisation with such a high number of people on furlough.”

Oxfam, the BHF, Barnardo’s and many others stated a large proportion of staff who have been furloughed work within its retail stores. Barnardo’s stated, “so there was a clear need for the use of the scheme for these colleagues from the start, and this need has not changed as our stores have remained closed in line with national measures”. 

They added: “Within other areas of the charity, as the scheme evolved so has our approach to making use of the flexible nature of it. Being able to rotate colleagues on furlough within teams for example has helped us to ensure that colleagues continue to feel engaged in their work and the charity. Enabling our colleagues to continue to play a significant part in the success of our work whilst balancing the challenges thrown at them during the past 12 months has been one of the positives of the scheme’s flexibility.”

With changes to the lockdown rules on 12 April, it is likely the largest 20 charities will be taking staff off furlough to staff charity shops and start up fundraising events.

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