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Legislation

Furlough scheme extended – with more flexibility

Michele SwalesBy Michele SwalesMay 12, 20203 Mins Read
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Chancellor of the Exchequer Rishi Sunak has today confirmed that the Coronavirus Job Retention Scheme will remain open until the end of October.

And from the start of August, furloughed workers will be able to return to work part-time, with employers being asked to pay a percentage towards the salaries of furloughed staff.

The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.

The Chancellor said: “Our Coronavirus Job Retention Scheme has protected millions of jobs and businesses across the UK during the outbreak – and I’ve been clear that I want to avoid a cliff edge and get people back to work in a measured way.

“This extension and the changes we are making to the scheme will give flexibility to businesses while protecting the livelihoods of the British people and our future economic prospects.”

CHANGES

New statistics published today revealed the job retention scheme has protected 7.5 million workers and nearly a million businesses.

The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August. More specific details and information around its implementation will be made available by the end of this month (May).

The Government will explore ways through which furloughed workers who wish to do additional training or learn new skills are supported during this period.

The Chancellor’s decision to extend the scheme, which will continue to apply across all regions and sectors in the UK economy, comes after the Government outlined its plan for the next phase of its response to the coronavirus outbreak.

Today the government is also publishing new statistics that show businesses have benefited from more than £14bn in loans and guarantees to support their cashflow during the crisis. This includes 268,000 Bounce Back Loans worth £8.3bn, 36,000 loans worth more than £6bn through the Coronavirus Business Interruption Loan Scheme, and £359m through the Coronavirus Large Business Interruption Loan Scheme.

LIFELINE

Mike Cherry, national chairman of the Federation of Small Businesses, said: “The Job Retention Scheme is a lifeline which has been hugely beneficial in helping small employers keep their staff in work, and it’s extension is welcome. Small employers have told us that part-time furloughing will help them recover from this crisis and it is welcome that new flexibility is announced today.

And BCC director general Adam Marshall said: “The extension of the Job Retention Scheme will come as a huge help and a huge relief for businesses across the UK.

“The Chancellor is once again listening to what we’ve been saying, and the changes planned will help businesses bring their people back to work through the introduction of a part-time furlough scheme. We will engage with the Treasury and HMRC on the detail to ensure that this gives companies the flexibility they need to reopen safely.

“Over the coming months, the government should continue to listen to business and evolve the scheme in line with what’s happening on the ground. Further support may yet be needed for companies who are unable to operate for an extended period, or those who face reduced capacity or demand due to ongoing restrictions.”

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Michele Swales

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