Furlough scheme extended to October and made more flexible

The UK furlough system has been extended to October, which will still offer 80 per cent of salaries to employees but the Government will ask employers to help towards the pay as well as allowing staff to work part-time.

This was announced by Rishi Sunak, Chancellor of the Exchequer in the House of Commons, who affirmed that the furlough rate would remain at 80 per cent, but companies will be asked to share the cost of the Coronavirus Job Retention Scheme (CJRS) from August onwards.

Also from August, the scheme will become more flexible, as employees will be able to return to work part-time. This is something employers asked for back in April, they wanted the Government to make the CJRS more flexible, making it possible for furloughed workers to work reduced hours.

Currently, 7.5 million people have been furloughed.

Mr Sunak said:

I’m extending the scheme because I won’t give up on the people who rely on it.

Our message today is simple: we stood behind Britain’s workers and businesses as we came into this crisis, and we will stand behind them as we come through the other side.

Mr Sunak rejected the idea that people may become addicted to the scheme which a senior government source stated last week.

Jon Heuvel, the employment partner at the law firm, Shakespeare Martineau, said:

For the moment, the Chancellor has answered the calls of the business community and extended the furlough scheme until the end of October. For employees who were worrying about taking a further hit to their salaries, the Government’s pledge to retain wage support at 80 per cent for the meantime will be a huge relief.

Whilst the onus has been put on employers to help shoulder some of the costs through increased contributions, there is some positive news. Being allowed to have furloughed workers undertake part-time work in the period from August to October means that not only can businesses start gearing back up with staffing levels appropriate to customer demand, but also that the financial hit of furlough contributions is reduced.

The Association of Professional Staffing Companies (APSCo) the professional body representing the interests of recruitment organisations, has welcomed this extension to the furlough scheme as they wrote a letter to Mr Sunak last week which asked for a managed withdrawal from the furlough scheme in order to get the UK economy back to work.

Ann Swain, chief executive of APSCo, said:

This is exactly what is needed.