Government urged to extend Furlough Scheme to June

With the Chancellor’s Budget just weeks away, the government is being urged to extend the furlough scheme, as a new report highlights employer concerns and the need for urgent action to protect jobs.

In a report: The Future for Furlough – Recommendations for now and for any future wage subsidy, the Chartered Institute of Personnel and Development (CIPD) are calling for government to:

• Extend the furlough scheme to the end of June 2021 and announce that decision well in advance, and certainly ahead of the March Budget, to give businesses a long-term picture of support so they can plan effectively and not risk jobs unnecessarily.
• Retain the Government subsidy at 80% to the end of April, reducing to 70% in May and June.
• Introduce a lower limit to the furlough scheme, set at the National Minimum Wage, to ensure no incomes dip below this level. This is important as those that are on the lowest rates of pay are least likely to have their furlough pay topped up by their employer.

Jonathan Boys, author of the report and labour market analyst for the CIPD, said, “The furlough scheme has been a lifeline for thousands of organisations, helping to protect jobs and keep businesses afloat. However, this latest wave of the pandemic shows that UK PLC won’t be operating as business as usual for many months yet, and that businesses need urgent help.

“Businesses need certainty now on what support will be available to them in the months ahead. Our survey shows that many want the furlough scheme to extend beyond April, but the Chancellor has said that this won’t be reviewed until March at the earliest. Businesses cannot wait that long for certainty, they need a clear indication of Government support to June at least and they need to know this in good time.

“To delay this decision unnecessarily risks losing viable jobs and increasing redundancy costs for employers, which can amount to thousands of pounds. Adding these costs to new hiring costs when businesses do open up again could prove to be a significant outlay for businesses that few will be able to afford. An early decision on extending the furlough scheme will give employers the certainty they need to make the right call for their business and their employees.”

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