September 26, 2020

Coronavirus: More than 9 million expected to be furloughed

More than nine million workers are expected to be furloughed under the government’s job retention scheme (JRS).

That is according to analysis by the Resolution Foundation, using the latest figures on take-up of the scheme from the British Chambers of Commerce (BCC).

The cost to the taxpayer over three months is estimated at £30-40bn.

Fresh figures from the BCC suggest nearly a fifth of smaller firms plan to furlough all their staff.

And 50% of companies are putting most of their staff into the scheme.

Urgent funding
The Job Retention Scheme aimed at protecting jobs has been widely welcomed by companies, which have seen their incomes plummet because of the shutdown and which need help to stay in business and keep staff on.

The figures underline the surge in demand for the JRS from firms hit by the shutdown that would otherwise have to make far more people redundant, worsening recent jumps in unemployment.

Employees can be put on furlough – a leave of absence – and firms can keep paying them, but 80% of their wages will be reimbursed by a grant from the government. The Treasury has promised companies the scheme will be ready by the end of the month.

The Resolution Foundation think tank calculates that if that pattern is repeated across the economy, then at least a third of private sector employees – somewhere between 8 million and 11 million people – will be furloughed.

The cost to government on those figures would be £30-£40bn over three months – roughly similar to the amount the government spends each year on police and safety.

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