Business leaders have welcomed the extension of a scheme that has protected millions of jobs, but some say more flexibility is desperately needed sooner.
Chancellor Rishi Sunak announced on Tuesday that the furlough system, which supports struggling companies by covering 80 per cent of staff wages while they are not working, will continue until the end of October.
From August, more flexibility will be introduced to enable people to return to work part-time, with employers expected to pay a percentage of their salaries and the state covering the rest.
Speaking in a Business West podcast, Phil Smith broadly welcomed the extension of a scheme he says has kept many businesses alive.
The managing director of Business West said it has kept redundancies down so far but stated the chancellor will need to be careful about how it should be wound down, warning there could be severe consequences if he gets it wrong. Smith added that there may need to be additional support for certain sectors if they are not allowed to return to normal by October.
Emersons Green-based company The HR Dept has been calling on the Government to amend the scheme, saying many small businesses desperately need an alternative to the “all or nothing” furlough option.
Jill Bottomley, who has been leading the company’s work on this, welcomed the extension of the furlough scheme, adding: “It is great news that the Government will be introducing a ‘part furlough’ intervention. However, the part furlough element needs to be introduced now to give employers the flexibility they need.
“This isn’t about forcing more employees to return to work where it is not right or safe to do so. It’s for the many businesses who desperately need that part-time intervention, especially where work can be carried out at home.
“The reality is that it’s too simplistic for struggling smaller businesses to continue with an ‘all or nothing’ furlough arrangement. There is currently no facility for what would be a suitable solution, where employees can work for a day or so per week rather than their contractual five days.
“So, a flexible solution is needed now, to let businesses continue with their work and so minimising the cost of the job retention scheme.”
A survey of more than 900 businesses conducted by The HR Dept revealed that 82 per cent of small firms would back the introduction of a ‘part furlough’ scheme.
Main photo by Lowie Trevena
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