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Flexible furlough scheme required to tackle re-start’s 'biggest challenge'

Car retailers would benefit from more flexibility from Government’s coronavirus job retention scheme (CRJS) as the financial balance of returning furloughed staff to work becomes businesses' "biggest challenge".

The Independent Garage Association (IGA) has written to the Chancellor of the Exchequer, Rishi Sunak, requesting an enhancement to the furlough scheme so that employees can partially return to work as the country prepares for the next phase of COVID-19 lockdown restrictions.

And as it did so, franchised car dealers revealed to AM the challenges they face in balancing the viability of their business and the wellbeing of their staff during the uncertain trading environment.

  • AM wants has compiled a quick, two-minjute survey to gather information about the levels of support received from Government and car retailers’ manufacturer partners as they battle to mitigate the impact of the COVID-19 coronavirus lockdown. Click here to take part.

Clive Brook group managing director, Clive Brook, said that he wants to get his two-site Volvo Car UK franchised business 100% up and running within a fortnight, but said returning staff to the business’ payroll during the period of low demand posed “the biggest risk to the business so far”.

Vertu Motors chief executive, Robert Forrester, meanwhile, said that “a very measured approach” was required to ensure that his businesses resources could be backed by demand.

Brook said: “It’s fairly obvious. When you bring someone back you have to have the income to justify their place in the business. It’s a fine financial balance to strike.

“Without doubt, managing the return to work will be the biggest challenge, financially, for the automotive retail sector.”

Speaking to AM last week, Forrester said that his group had 1,000 of its 6,000 workforce back in the business and he expected Vertu’s aftersales operations to be 100% up and running again by the end of the week. He added: “You are forgoing that Government support when you bring staff back but we have a business to run and we have a lot of customers.

“We have a very measured and controlled approach where we consider our available resources.”

One car retail group boss likened the choices made in returning staff to work to “picking the school football team” and suggested that the longer retailers choose to phase the return to work process, the bigger impact it will have on the morale of furloughed employees.

“I want my team coming back like tigers, ready to embrace the challenge of getting the business back up to speed,” he said. “I’m really conscious of the phycological impact of coming back, and on those that are left on furlough for a longer period as their colleagues return.”

The IGA’s recent letter to the Chancellor of the Exchequer, Rishi Sunak, requested an enhancement to the furlough scheme so that would allow employees to return to work “partially” as the country prepares for the next phase of lockdown restrictions.

It hoped that such a change to the current CJRS scheme could help smaller aftersales businesses phase their return to work in a way that would preserve their viability.

The change would see the UK’s furlough scheme mirror that of France which, the IGA claimed, “gives businesses the flexibility to bring in employees as and when they are needed, while claiming back a percentage of their salary for any hours not worked”.

The same policy could be advantageous to smaller, solus car retail operators.

IGA chief executive, Stuart James, said: “As businesses ready themselves for the next stage of lockdown, we are asking the chancellor for a level of flexibility within the furlough scheme so businesses can be supported throughout their reopening.

“Garages have been classified as an essential service throughout this crisis, however it has been very difficult for many of them to remain open in the current climate.

“It is common for garages to have staff dedicated to the role of MOT testing who do not repair cars.

“Due to the drop off in work volumes caused by the MOT extension and lockdown restrictions, garage owners have been left with no choice but to furlough these dedicated staff and, in many cases, close their business.

“Most MOT tests are booked in advance, so if testers were able to return to work part-time with the help of an enhanced furlough scheme it would reduce the costs to the government, help garage businesses reopen in a phased, progressive manner, and help the economy work its way back to normality.”

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