The Furlough scheme has been one of the most used support systems during this coronavirus crisis for business owners.
It has enabled staff to stay at home, while the government pay 80% of wages, up to £2,500 a month, relieving pressure on owners.
However, there has been lots of fear and worry about whether the support is sustainable for the economy, and Chancellor Rishi Sunak has been keen to update everyone about the future of the Furlough Scheme.
In an announcement that could have gone either way, Rishi Sunak announced that he would be extending the Furlough Scheme until the end of October.
However there have been some serious changes to the scheme, which we will outline below.
Changes To The Furlough Scheme
The government will continue to pay 80% of workers wages, up to £2,500 a month, until the end of July.
After that businesses will be required to part fund workers wages, and ‘start sharing’ the cost of the scheme in August.
This would in theory, look like workers returning on a part time basis, until the scheme is officially wrapped up in October.
Rishi Sunak said: “I’m extending the scheme because I won’t give up on the people who rely on it.”
Of course, this news will delight those businesses who are making the most of the scheme. However, it also shows that decisions must be made moving forward, about reintegrating staff.
A Huge Cost To The Economy
Currently the scheme is costing the government £14bn a month, and a quarter of the UK’s workforce are currently on the scheme.
In order to prepare for the scheme to wind up, businesses will need to start considering their next steps moving forward.
As a business owner, begin asking yourself:
- If staff return to work on a part-time basis in August, what can you enforce to ensure that they remain socially-distance at all times?
- What PPE can you start getting in place for when workers return to the workplace?
These will be huge decisions to make for business owners, however the battle to help the UK’s economy to recover will be in full swing come the summer.
There are lots of unanswered questions, and time will tell what the answers will be. If the UK has a second spike as lockdown measures are relieved, the government may be forced to extend the scheme yet again.
One thing seems for sure; with the GDP falling fast, it looks almost certain that the UK will be facing a significant recession, which businesses need to start preparing for.
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