Ahead of the Chancellor’s Budget, it has been confirmed that the Coronavirus Job Retention Scheme will be extended until the end of September.

This comes after the Business Secretary confirmed that the Chancellor would be extending the furlough scheme in order to avoid crushing potential recovery in the labour market and wider economy.

This will be the fourth extension made to the furlough scheme over the past year. Initially expected to end at the start of November in 2020, Chancellor Rishi Sunak then announced the decision to extend this until the end of March.

After a review in January 2021, this measure was then said to be kept in place until the end of April.

Now, it has been confirmed that the scheme is set to be extended until the end of September. However, from July, employers will be asked for a contribution of 10 per cent. In the following months (August and September), this contribution is set to rise to 20 per cent towards the hours their staff do not work.

As it currently stands, an employer can claim 80 per cent of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. However, employers are expected to cover employer National Insurance contributions and pension costs.

Chancellor Rishi Sunak also told Sky News that he would do “whatever it takes” to support workers and stated there is “more to come” in the Budget announcement.

This comes after recent statistics showed that furlough numbers across all sectors rose in January 2021, reaching 4.7 million people on furlough by the end of the month – ultimately showing that many businesses are still using the scheme as a lifeline to stay afloat.

Frances O’Grady, TUC General Secretary, stressed that more needs to be done:

Extending furlough is vital to protect jobs and businesses. The chancellor should have announced it earlier, and should now promise it will last as long as needed to secure the recovery.

Reducing support to employers in July, just as restrictions end, will risk jobs. The job retention scheme should be available until at least the end of the year.  And without specific support, the hardest-hit sectors – like hospitality, retail, the creative industries, travel and aviation – will struggle to reopen fully.

To make sure everyone can return to a decent job, ministers should promote training for those on furlough. The chancellor should also make sure all furloughed workers get at least the national minimum wage.

Protecting existing jobs is only half the battle. The chancellor must now deliver a major programme of job creation in his Budget.