Could the furlough scheme be extended beyond October? Calls for extension over job loss fears

Monday, 7th September 2020, 3:10 pm
Updated Monday, 7th September 2020, 4:54 pm
Experts say a wave of mass redundancies could be on the way post. (Photo: Shutterstock)
Experts say a wave of mass redundancies could be on the way post. (Photo: Shutterstock)

Calls have been made to extend the furlough scheme in order to avoid a fresh wave of redundancies across the UK.

How is the furlough scheme changing?

For several months now, the government-backed furlough scheme has paid a percentage of millions of workers’ wages while it has not been possible for them to work. 

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The aim was to retain as many jobs as possible and avoid mass unemployment.

However, the scheme is due to end at the close of October, with the government already reducing their contribution from 80% at the start of the scheme to 70% of workers’ wages as of September.

Should the furlough scheme be extended? 

The Labour Party and industry leaders have called on the government to extend the furlough scheme beyond October or risk a second wave of job losses across the UK.

Manufacturers’ organisation Make UK has said that a survey of more than 220 companies has shown strong support for extension, with manufacturers particularly hard-hit by the pandemic over the past few months. 

The survey revealed that almost a third of the companies who took part intend to make some staff redundant in the next six months, with two-fifths of companies already having done so. 

In addition to job losses, Make UK also warned that key skills could also be lost without an extension.

Leading welfare think-tank The Resolution Foundation has said that around half of the 9.2 million people placed on the scheme have still not gone back to work.

They have warned that these people now face the prospect of redundancy.

Is the government considering extending the scheme?

Currently, the government has given no indication that it plans to extend the scheme.

The furlough scheme has already been lengthened twice - extended first into June, then into October.

What other help is the government offering?

The government has announced an £1,000 retention bonus to employers willing to bring furloughed employees back to work.

A “Kickstart scheme”, costing £2 billion, is also aimed at helping young people aged 16-24 into work.

The scheme will be available to those on Universal Credit who are at risk of long-term unemployment, with government funding covering 100% of the national minimum wage for 25 hours of work a week.

The government has also announced new funding for the National Careers Service, allowing more people to receive advice on finding work, while investment will be made in traineeships for young people. 

Schemes like Eat Out to Help Out were designed to help retain jobs in the hospitality industry, with the government additionally looking to create new jobs in sectors like housing.

A version of this article originally appeared on our sister title, The Scotsman