On Sunday, the furlough scheme will be wound down further as the government asks employers to make a bigger contribution to the wage support programme.
Around 1.3million people were on the scheme at the beginning of July, down from a peak of 5.1million at the height of lockdown in January. Under the Coronavirus Job Retention Scheme (known as furlough) staff receive 80% of their current salary, capped at £2,500 per month.
The much-praised scheme has been extended several times but will end on 30 September. It’s credited with preventing a spike in unemployment but now there is a rising fear that jobs will be lost when it ends.
The scheme, drawn up after long, protracted talks with business groups and union leaders, has cost taxpayers almost £50billion so far. That has given rise to speculation that taxes will have to rise to pay for it.
The government has largely footed the bill for furloughed workers, but since 1 July employers have been asked to contribute 10% towards the wages of furloughed workers for hours their staff do not work. That amount will rise to 20% in August and September which will make the scheme less appealing to employers, although firms are relying on it less as the economy reopens.
Since the start of the scheme, a cumulative total of 11.6million jobs have been supported by the CJRS at various times, but according to the Institute of Employment Studies, the number of people on furlough has been “dropping like a stone” as the economy starts to reopen.
When the scheme finally ends, some industries could be more exposed to a rush of redundancies than others, such as aviation and transport, which remain subject to restrictions. And support jobs such as office cleaning, security and delivery could also be lost if workers do not go back to the office in the same numbers due to the rise in home working.