More firms than expected plan to furlough staff

Thirty-seven per cent of employers are planning to furlough between 75 and 100% of their staff.



Over a third of businesses [37%] are planning to furlough between 75 to 100 per cent of their workforce over the next week, according to a British Chambers of Commerce survey.

The survey of 1,000 businesses was conducted in early April. The BCC says the percentage of firms intending to furlough 100 per cent of their staff has increased from 17 per cent to 20 per cent in a week.

Analysis by the Resolution Foundation think tank found the furlough scheme may cost £30bn-40bn over three months, three times the size of initial estimates. Meanwhile, HMRC warned that anyone working for the employer who furloughed them would risk losing their pay. However, the Government will not block furloughed employees from taking on additional work at another employer during the crisis.

The BCC survey also found low take-up of support for businesses, despite good awareness of the schemes.

Just one per cent of firms had successfully accessed Coronavirus Business Interruption Loan Scheme, with just eight per cent being successful, and only seven per cent of small businesses are receiving government grants. This is despite the fact that 57 per cent of firms say they have three months cash in reserve or less while six per cent say have already run out of cash. Over half [59 per cent] of businesses know about the CBILS scheme  and 19 per cent say they plan to use it while 42 per cent know about the grants available for small businesses and 24 per cent plan to use it. Fourteen per cent of small businesses had been unsuccessful in securing grants, mainly because they did not meet the criteria.

The BCC says  businesses have criticised the CBILS’ complexity and the general slowness of the process of applying for business support.

BCC Director General Dr Adam Marshall said: “Our latest data shows that many businesses face a cliff-edge scenario, either at the end of this month or over the course of the next quarter.

“We’ve seen a big jump in the number of firms furloughing staff, and many are now starting to apply for access to government loan and grant schemes to keep themselves afloat. Our research suggests that support is only starting to reach firms on the ground.”

On Wednesday afternoon, the Chancellor announced £750m of extra funding for frontline charities who are suffering enormous losses in income due to the coronavirus: £360 million will be directly allocated by government departments to charities providing key services and supporting vulnerable people during the crisis and £370 million will be available for small and medium-sized charities “at the heart of local communities which are making a big difference during the outbreak, including those delivering food, essential medicines and providing financial advice”.


The Chancellor also announced the Government will match fund whatever the public decides to donate to the BBC’s Big Night In charity appeal on 23 April, starting with a contribution of at least £20 million to the National Emergencies Trust appeal.

Meanwhile, a survey by the Recruitment and Employment Confederation and KPMG has found that job vacancies in the UK contracted for the first time in more than a decade in March as staff numbers across all industries were reduced during the coronavirus outbreak.

And the Institute for Employer Studies says its early analysis suggests young people, the low paid and women will be more at risk of any coming recession because of the sectors they tend to work in. It adds that older people are also likely to be particularly at risk. It says that it is unclear how much unemployment will rise in the coming months and that this depends on how long the lockdown lasts, but it thinks it is highly unlikely that there will be a steep recovery in employment or unemployment in the near future. The report says: “We expect that it will take years rather than months for the labour market to fully recover.”

The IES is therefore a new Back to Work campaign, underpinned by local Back to Work Partnerships and a Back to Work Service for the long-term unemployed and a range of other approaches such as refocusing skills and training to support the recovery and plans for an orderly withdrawal from the Job Retention Scheme.


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