Lockdown 2.0 – what to expect and lessons learnt

As England enters its second lockdown, organisations are once again having to adjust its ways of working to align with Government guidance.

In this ebriefing, we will give a short summary of the principal differences from the first lockdown in key areas for the housing sector. As you will see from our note this is a fast-changing area so keep in touch with us by:

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Employment
Lockdown #2 brings us an extended Coronavirus Job Retention Scheme (CJRS) and potentially shielding by the back door but with some differences. As expected, inconsistencies between announcements and guidance persist and it is our job to help you navigate through them. The position is changing on a daily basis so the following summary reflects the position at 17:00 on 5 November 2020.

• The extended CJRS appears to be available in some respects to a wider group of people than before. According to the Chancellor’s press release, all employees on PAYE as of 23:59 on 30 October 2020 are eligible. This includes people who were not on the payroll during Lockdown#1. However, this has not been reflected in the Government guidance issued on 1 November 2020, which still states that employees furloughed prior to 30 June 2020 are eligible. We expect that is an error but we await clarification in the Government Guidance expected on 10 November 2020 which will be updated to tell employers when they can claim the extension and will set out the rules relating to the extension. Another difference from the first lockdown is that under the extended CJRS, employers are expected to pay national insurance and employer’s pension contributions for hours not worked with the Government paying 80% of wages up to a cap of £2,500 per month. Flexible furloughing is allowed under the extended CJRS as well as full-time furloughing. In addition, employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date can be re-employed and claimed for under the extended CJRS. On 5 November, the Chancellor announced that the extended CJRS will be extended to the end of March 2021.
• Shielding #2: under the updated guidance on shielding and protecting extremely vulnerable people from Covid-19 on 4 November 2020, it states that employees who are extremely clinically vulnerable may be furloughed subject to them meeting other eligibility criteria. A policy paper issued on 5 November 2020 confirmed employees can be furloughed where they are unable to work because they are “shielding in line with public health guidance” (or need to stay at home with someone who is shielding); or have caring responsibilities resulting from coronavirus, including employees that need to look after children.

Regulatory
It is clear that providers will be permitted to complete repairs and safety-related compliance checks and should take a risk-based approach to balance any competing Covid-19 and safety risks. In all cases, providers will need to ensure that they comply with the most recent Government guidance, conduct a careful risk assessment taking into account the lessons learned earlier in the pandemic and keep careful records of the decisions made and the actions taken to ensure compliance.

Providers of supported housing will need to consider whether to restrict access, close communal areas and how they would respond in the event of a major outbreak.

Providers should also anticipate and be ready to address a reduced level of cooperation from tenants, both in relation to those who refuse access for safety checks and those who refuse to comply with Covid-19 restrictions and safety measures. One key response will be to ensure that all measures taken are clearly and effectively communicated.

There is also likely to be an increased risk of employee fatigue and stress which, combined with absence due to Covid-19, may also impact in terms of service delivery.

Housing litigation
A letter sent by the Lord Chancellor to bailiffs on 5 November 2020 makes clear that bailiffs cannot proceed with any residential property evictions during lockdown 2 for public safety reasons save where they fall into a list of exclusions which include:

• ASB or mandatory ASB ground cases;
• Trespassers claims against persons unknown;
• Cases relying on the domestic abuse ground;
• Cases relying on Ground 7 where property is empty after death of assured tenant; and
• Fraud ground claims.

There is also an intention to introduce an exemption for cases with “extreme pre-covid rent arrears”.

We presume the “Christmas truce” dates 11 December to 11 January still apply to all cases.

Property
For RP’s development and sales teams, there is welcome confirmation from Robert Jenrick that house moves can still take place and removals firms and estate agents can operate.

Funding
We have recently seen that Moody’s, the credit rating agency, has opted to affirm all ratings for housing association issuers despite downgrading its ratings in other sectors. This is due to the sector benefitting from expenditure flexibility allowing for reductions in costs to respond to poorer economic and financial conditions. This, along with the low gilt rates, may provide an opportunity for housing associations to borrow from the bond markets securing low rate borrowings whether via own name issuances, retained bond issuances, private placements or via aggregators such as bLEND Funding Plc. It is worth remembering that even if the cash is not required now, deferred deals are possible, allowing housing associations to take advantage of the low rates but avoid the carry costs.

Construction
Government is still encouraging construction to continue, including work in people’s homes. This approach is likely to impact any claims for force majeure or extensions of time, although these will clearly depend on the terms of the contract. Employers and contractors need to be aware of and working to the latest version of the CLC Site Operating Procedures, which is now on version 6.

Procurement
There is no equivalent (yet) for this lockdown of Procurement Policy Note 02/20 encouraging contracting authorities to provide support to their suppliers and contractors. Instead, all such support should have been phased out by the end of October, in line with PPN 04/20. However, the speed at which the country moved into this lockdown may have taken the Crown Commercial Service by surprise so this may be “in the pipeline”. This will come as little comfort to those suppliers who relied on support from their public sector customers to get them through the previous lockdown. Despite this lack of guidance, contracting authorities should still be approaching their suppliers and discussing their financial position and ability to continue to deliver under their contracts. These discussions should include what support, if any, the supplier may need (eg. shorter payment cycles) and which contracting authority may be prepared to provide.

Governance
Flexibility over annual returns and accounts – The FCA had previously explained that, while they ask societies to take steps to submit their returns to them as soon as reasonably practicable, it has confirmed that it would not take any action before 31 October 2020 to follow-up on any delayed submission where the delay is of 3 months or less. The FCA has recently issued further guidance that, for annual returns and accounts due for submission by 30 April 2021, they will not take any action to follow-up on delayed submissions, where the delay is 3 months or less.

Savings provisions for General Meetings – The measures allowing General Meetings to be held on a virtual basis have been extended until 30 December 2020. Sadly, they do not extend the deadlines where AGMs must be held by 30 September but they do enable those organisations who have not changed their rules to incorporate the use of virtual meetings until the end of the calendar year. More information can be found here.

For more information
For further help contact your usual Anthony Collins Solicitors contact or Jonathan Cox.

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