Budget 2021: Furlough scheme extended until September

The Chancellor has extended the furlough scheme until the end of September in a Budget which focused on recovery from the pandemic, but excluded anything specific on childcare.

British pound coin and notes


The Chancellor has announced that the furlough scheme will be extended until September in his Budget speech, which contained announcements on green industry and ports, but nothing specific on investment in childcare.

Rishi Sunak also said there will be a fifth round of the Self Employment Income Support Scheme covering the three months from July. And he extended support for the self employed to 600,000 people who became self employed in 2019/2020.

The extension of the furlough scheme means employees will be guaranteed 80% of their salary up to a limit of £2,500 a month, with employers being asked to pay 10% of the 80% in July and 20% in August and September.

Sunak said he expected the UK economy to return to pre-Covid levels by middle of 2022 and said unemployment was expected to peak at 6.5% next year.

Sunak also announced a six-month extension to the £20 a week increase in Universal Credit for six months, to be paid as a one-off lump sum of £500. Anti-poverty campaigners had been hoping for the increase to be made permanent, given the estimates of rising unemployment over the next year.

The Chancellor also said eligible retail, hospitality and leisure businesses will not have to pay business rates for three months, with up to 66% relief for the rest of the year worth over £6 billion in 2021-22, and the temporary VAT reduction for hospitality and tourism is extended. There will also be a £300m culture recovery fund.

Other announcements include:

  • a rise in the national living wage to £8.91 an hour from April
  • a ‘green industrial revolution’, including an infrastructure bank based in Leeds and a sovereign green bond
  • a ‘super deduction’ tax break for firms that invest
  • free training and digital skills support for eligible businesses
  • £19m for domestic violence programmes
  • visa reforms for ‘highly skilled migrants’ to attract talent in science and technology
  • pension flexibility
  • eight free ports, backed by new regional economic institutions

The Chancellor announced some ways the Government will seek to recoup the money spent on the pandemic, including a freeze in personal tax thresholds. The basic allowance will continue to go up to £12,570 this year, but will be frozen at that level until 2026. The higher rate threshold will also go up to £50,270 and also be frozen until 2026. Larger companies will also be hit by a rise in corporation tax from 19% to 25% from April 2023. Companies with profits less than £50K will still pay 19%.


Despite nurseries being able to benefit from business rates extensions, there was nothing specific on childcare, despite concerns that many childcare providers say they are on the brink of collapse and despite repeated calls from campaigners for investment in childcare as an essential part of the infrastructure needed to get parents back to work. And there was no extra funding for schools beyond existing planned budget increases and catch-up schemes already announced by the government.

Reaction to the Budget has varied between relief at the extension of the furlough and associated schemes to concern about the lack of announcements on childcare and the ‘cliff edge’ ending of the Universal Credit uplift.

The Institute for Fiscal Studies has also criticised the longer term outlook for public sector spending.


Post a comment

Your email address will not be published. Required fields are marked *

Your Franchise Selection

Click the button below to register your interest with all the franchises in your selection

Request FREE Information Now

Your Franchise Selection

This franchise opportunity has been added to your franchise selection



Click the button below to register your interest with all the franchises in your selection

Request FREE Information Now

You may be interested in these similar franchises