The country’s biggest academy trust furloughed staff across its private schools for the Christmas holiday, a tactic one law firm advises is “unlikely to be within the spirit of the scheme”.
United Learning, which has 74 academies and 14 private schools, applied for public funds to pay teacher salaries from December 12 to January 4, emails seen by Schools Week reveal.
You can’t just access the scheme to fund staff holidays
Michael Hall, headmaster at Ashford School in Kent, told staff at the start of December that United Learning had decided “to make wider use of the furlough scheme across all the trust’s independent schools” during the holiday.
The email added that all teaching staff at Ashford would be furloughed for three weeks of the Christmas period.
Hall said there was “no immediate risk to jobs”, but that school finances were “not sustainable”.
Government guidance on the furlough scheme says employees should not be placed on furlough “just because they are going to be on paid leave”.
It also says employees can only be placed on furlough “if coronavirus is affecting your operations”.
It appears the school has used the furlough scheme to finance the Christmas holiday period
A United Learning spokesperson said the trust had followed all legal advice, including not furloughing anyone on leave, and had taken advice from lawyers, auditors and HMRC.
But Joanne Moseley, an employment lawyer at Irwin Mitchell, said she had advised her private school clients not to use the furlough scheme in this way.
“Yes, in principle, as a private school if you’ve suffered a reduction in fee income because of coronavirus, you can access the furlough scheme.
“But here it appears the school has used the furlough scheme to finance the Christmas holiday period. You can’t just access the scheme to fund staff holidays.”
Harrison Clark Rickerbys solicitors says on its website that it may be possible to furlough staff during the Christmas holidays, but any decision should “ideally be made on a case-by-case basis”.
“In many cases we consider that it is unlikely to be within the spirit of the scheme to utilise it in this way.”
Schools were ‘fully entitled’ to furlough staf
But the United Learning spokesperson said that independent schools were “fully entitled” to furlough staff, as were other significantly affected charities and businesses.
The issue highlights the financial pressures many private schools have faced during the coronavirus period.
Although there is no overall estimate for income loss for the sector, examples such as a prep school in York closing after a £5 million budget shortfall demonstrate the scale of the challenge.
In his email, Hall said the “loss of over 40 boarders” since 2019 had “severely impacted” finances.
Moseley said the trust’s decision to apply for furlough money also raised the question of differing interpretations of government guidance.
“The guidance is complicated, not least because it’s not all in one handy place. There are at least 12 different documents that organisations have to read to understand how the furlough scheme works.”
She said that HMRC had six years to look at claims and would ask for money claimed in error to be returned.
In September, HMRC told the public accounts committee the error and fraud rate on the furlough scheme was likely between 5 and 10 per cent – between £1.75 and £3.5 billion.