For clubs further down the Scottish football pyramid it may be that the Government’s Coronavirus Job Retention Scheme may be a life jacket.
With football clubs forced to send players on temporary leave, the government have introduced a ‘furlough’ scheme. For those eligible, it means you can now make a claim to cover wages for players and other employees forced onto temporary leave due to the restrictions in place due to Covid-19.
As things stand Celtic are not massively affected so far, financially we are more than likely to cope just fine – for now at least – however when you consider other Scottish clubs financial predicament that’s certainly not the case. In particular those clubs in the Championship and League One and Two as well as a few lower profile clubs in the top flight.
To take advantage of this government assistance, Employers rather than the players themselves would need to make a claim for wage costs through the scheme.
The club would then receive a grant from HMRC to cover the lower of 80% of an employee’s regular wage or £2,500 per month. On top of this the clubs would also get the associated Employer National Insurance contributions and minimum employer pension contributions on that subsidised wage.
For players in the Championship and below this would mean many would get the vast majority of wages due covered by the scheme. For higher paying clubs like ‘the’ Rangers, Hearts, Hibs or Aberdeen it may mean a minimal difference, for the likes of Inverness, Falkirk, Raith Rovers etc this could be a game changer.
Clubs wouldn’t be able to claw anything back in terms of bonuses as they aren’t included in the scheme but for many clubs this looks like it could be the difference between just about staying afloat and going under. Without gate money and associated match-day revenue most clubs are already saying that they don’t see themselves managing to continue as a going concern beyond the three month mark, some are even saying their need is immediate.
As ever the devil may well be in the detail.
At a minimum, employers must pay their employee the lower of 80% of their regular wage or £2,500 per month. An employer can also choose to top up an employee’s salary beyond this but is not obliged to under this scheme.
If the employee has been employed for a full twelve months prior to the claim, you can claim for the higher of either:
* the same month’s earning from the previous year
*average monthly earnings from the 2019-20 tax year
If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.
If the employee only started in February 2020, you can use a pro-rata calculation for their earnings so far to claim the payment.
The good thing for club’s lower down the pyramid is this scheme is also open to part-time employees it is not just for those employed on a full-time basis and the other advantage is clear.
Those working in other roles but still employed by the club would be eligible, helping those employed in ticket offices, roles in administration or on match days. It could go a long way to saving clubs from making otherwise unavoidable redundancies.
One worry however could be that club’s themselves may be taken actions at present that would scupper their entitlement.
It’s been claimed clubs could be denied government assistance if they are seen to be giving players fitness programmes – which could be interpreted as employees working under instructions from bosses. There seems an easy way out of that. Stop giving those fitness plans for now and allow the players to take responsibility for keeping themselves fit and creating their own programmes. Without that link then clubs would be free to make a claim in good faith.
Ann Budge has already made the very public step of trying to protect Hearts as a going concern, she has already instructed players to take wage cuts or face having their wages suspended. An understandable position given the size of Hearts wage bill and no money coming in.
For Aberdeen they are covered by a pandemic clause in their insurance, however that insurance is due to expire in April and their insurer has indicated that clause will not be available in the new policy.
Meanwhile Peterhead players have already agreed to take massive wage cuts and some forego their entitlement entirely until the league season re-starts. Whilst that is commendable it may be this government scheme will help cover most of wages due negating the need for this sacrifice, more than likely this scheme would cover the full 80% entitlement in the case of Peterhead.
For Celtic this may well not be something to consider but it could be a vital support for opposition clubs, so we at least have teams to play against as and when football returns to some form of normality. Without this safety net it’s far from certain that would be the case.
Niall J
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