Almost half of businesses with furloughed workers expect to cut some staff when scheme ends


ALMOST half of businesses with furloughed workers expect to cut some staff when the scheme ends.

The coronavirus job retention scheme currently covers 80 per cent of wages for 9.3million workers – up to £2,500 a month each.

Almost half of businesses with furloughed workers expect to cut some staff when the scheme ends

But businesses will start picking up the bill in August when they have to pay national insurance (NI) and pension contributions for furloughed workers. 

Then from September, they will have to pay 10 per cent of salaries, plus NI and pension contributions. 

In October, businesses will have to pay 20 per cent of salaries, plus NI and pension contributions. At the end of October the scheme will end.

According to a study by think tank Bright Blue and research firm Opinium, 44 per cent of businesses plan to let some, more, or all of their furloughed staff go when the scheme closes.

Medium-sized businesses with between 50 and 249 employees are most at risk, with 65 per cent of them saying they’ll have to cut jobs.

Meanwhile, 24 per cent of businesses with furloughed workers said they aren’t confident they’ll be able to contribute to the scheme from August.

The study was based on responses from 520 businesses.

It comes after a grim week for jobs with 12,000 roles being put at risk in just one day by businesses including Upper Crust, Airbus and EasyJet.

And only today Pret says 30 shops will close for good putting at least 1,000 jobs at risk.

The Centre for Retail Research (CRR) has found that more than 24,000 jobs have already been lost at high street retailers in administration in the first half of this year.

While almost 32,000 jobs are still at risk of being permanently axed.

Trade union body TUC today also warned of the risk of mass unemployment in the South West as it urged Chancellor Rishi Sunak to support the region.

In the South West, an estimated 878,800 workers (32 per cent of the workforce) have required support from either the furlough scheme or the self-employment support scheme.

James Endersby, chief executive of Opinium Research, said: “The Government’s job retention scheme has provided critical life support for UK employment during the crisis this far.

“But as this week has demonstrated, the impact of Covid-19 on the UK economy has begun to hit home.

“Unfortunately, our research suggests that this could just be the beginning.

“With 44 per cent of businesses expecting to cut jobs when the furlough scheme ends, the government’s emergency budget is urgently needed.

“What’s clear is that support for medium-sized businesses and unemployed workers will be particularly important.”

Anvar Sarygulov, senior researcher at Bright Blue, added: “In the months ahead, the government will have to effectively follow-up on current policies, to both contain the economic fallout from the crisis and to build the road to the recovery.”

HOAR contacted The Treasury for comment.

Up to two million Brits could lose their jobs as firms cut costs to survive the coronavirus pandemic.

Officials has previously said the Chancellor faces a “terrible set of choices” to spread the risk the crisis poses to public health, finances and jobs.

Many firms which survive the lockdown will be forced to slash their workforces to remain viable.

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