The voice of specialist further education

COVID-19: Finance and business issues

COVID-19: Finance and business issues

Last updated: 1 June 12.00

***Latest updates***

1 June: updates to Job Retention Scheme (see 1.2 below)

22 April: High needs funding confirmation of payments contained in financial support guidance – see 1.1.

18 April: New government guidance on financial support for education and children’s social care added, including clarifications about use of the job retention scheme – see 1.2

29 March: Employment law advice from Veale Wasborough Vizards, a firm specialising in charities and advisers to the Natspec HR forum -see 1.2

Issues affecting Natspec members

The following information and resources may be useful to you during the COVID-19 pandemic. If there are topics or materials not covered that you would like to see included, let us know.


Government announcements     Resources: supporting students’ learning    Keeping in touch

1.1 Contracts

The financial support guidance has been updated (22 April) with confirmation that funding for specialist colleges “will be maintained and not reduced because many pupils are not in attendance (either because of self-isolation, or where the institution has closed). This includes top-up funding in respect of individual children and young people, which will still be needed by the school to keep their staff in employment”

The government’s confirmation is consistent with the legal advice commissioned by NASS and Natspec on schools and colleges not being paid in event of closures caused by COVID-19 which concludes “there is no justification for a local authority to refuse to pay schools/colleges if there is a statutory direction requiring them to close.” The legal advice is available here.

For social care and other contracts colleges may have with local authorities, the Cabinet Office has advised councils to maintain payment to all suppliers at least until the end of June.

1.2 Employment issues

Many Natspec colleges operate as part of a wider charity or company. Veale Wasborough Vizards, an employment law firm that advise Natspec’s HR forum, has issued the following guidance (N.B. this applies only to charities):

Covid-19 employment law advice for charities: advice for charities regarding the measures they can take, as employers, with their staff during the pandemic

Coronavirus briefing for trustees: A guide to trustees with useful links to further information

The Coronavirus Job Retention Scheme: This was initially announced on 27 March, giving colleges the chance to furlough non-publicly funded staff and claim 80% of their wages. The scheme should not be used for those staff who are publicly funded (education / social care).  VWW issued this advice to charities about the scheme.  

On 29 May 2020, the Chancellor announced details of the extension of the job retention scheme. The key points for specialist colleges are:

  • The existing rules will continue for June and July 2020
  • The government will pay 80% of pay up to a cap of £2,500 in August 2020 but will expect employers to pay employer national insurance and pension contributions.
  • The government will cut its contribution to pay up to 70% (up to a cap of £2,187.50) in September 2020 and to 60% up to a cap of £1,875) in October 2020
  • The scheme will close to new entrants on 30 June but part-time working arrangements will be allowed for the final 4 months

Guidance on the financial support for education, early years and children’s social care: clarifies the position on furloughing staff for providers in receipt of public funding, including special post-16 institutions.

1.3 Insurance

All colleges should check their insurance policies carefully and, if needed, talk to their insurers about what is or isn’t covered in respect of virus-related disruption.

The following advice was given to NASS by a leading insurance company, based on common knowledge of insurance policies currently held by schools. We presume the situation for colleges is similar.

1.2.1 Travel insurance

Travel Insurance policies have a number of different sections and the following should be considered:

  • Personal Accident – this section of a travel policy will only respond if injury / death results from an accident rather than illness, therefore if an employee were to die from coronavirus, the benefit would not be paid out.
  • Medical Expenses – if an employee was travelling on business and contracted coronavirus, the medical expenses section would cover the medical and associated costs.
  • Cancellation – the trigger for the policy to respond is generally ‘cancellation due to a force outside of your control’ so this would be things such as flights being cancelled by the airline, hotels being closed or the foreign office advising against all but essential travel. All policies will contain a specific exclusion for a decision being made by the company to voluntarily cancel even though you feel this may be in the best interest of employees.

1.2.2 Business interruption

  • Where a company has purchased Business Interruption coverage for loss of revenue and/or increased cost of working, the trigger for the policy to respond will be ‘property damage’
  • Some Insurers offer extensions to the Business Interruption coverage for ‘non-damage’ situations such as ‘Infectious Disease and or Notifiable Illness’ – these extensions will be detailed in the policy wording, however it is important to note that these do not always come as standard and the policy schedule should be reviewed in conjunction to establish if these extensions are operative
  • The wording of the extension is important as they can relate to either ‘specified’ or ‘unspecified’ diseases / illnesses – with the majority of Insurer wordings being on a ‘specified basis’
  • If the wording is ‘specified’, coronavirus will not be covered
  • If the wording is ‘unspecified’ your Insurer should look to respond to the claim. It is important to note that this extension is likely to be sub-limited to a lower amount such as £100,000 and details of this should be in the policy schedule
  • If the wording is ‘unspecified’ the two key triggers, for which both need to be satisfied, for the extension to respond will be; the disease / illness to be at your premises (or sometimes within a certain mile radius depending on the wording) AND the premises to be closed by the Public Authority rather than a decision by leadership to self-isolate.


1.4 Communications with parents and staff

In terms of communications, you will have your own procedures in place for passing on information and communicating, for example, the measures you have in place around good hand washing, staff continuity cover, support for young people at home and many other issues.

For staff, follow the latest government advice regarding people self-isolating if they are ill or have recently returned from high-risk areas. Beyond that, communications should cover the ‘obvious’ things like making sure staff who are unwell do not report for work but do immediately let college know if they have been in contact with the virus and/or have symptoms. See also section 2 below regarding remote working and support for e-safety.

1.5 Business continuity plans

Most of you will be reviewing these plans as the pandemic could have an impact on all aspects of the college. Plans need to be wide-ranging and to have risk assessed against immediate and longer-term risks. Areas to consider include:

  • Safe staffing levels and contingency plans
  • Running at weekends/holidays if students and staff cannot go home
  • Getting staff to and from the site
  • Getting food and other supplies to the site
  • Getting waste removed from the site
  • Impact on referral numbers


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