Call for furlough to be extended as half of firms plan job cuts

Industry leaders are stepping up calls for the Job Retention Scheme to be extended to help the economic recovery.

Make UK warned that skills could be lost, leaving the UK in the “slow lane”, behind competitors.

The manufacturers’ organisation said a survey of more than 220 companies showed strong support for extending the furlough scheme, which is set to end next month.

And more than half of medium-sized businesses are planning job cuts as the Government’s Job Retention Scheme comes to an end in October, separate research suggests.

Nine out of 10 firms surveyed by business advisory firm BDO said they had already made up to a fifth of their staff redundant.

More job losses are expected in the coming months, with fewer than 10% of respondents saying they have no plans for any job cuts.

Leaders of mid-sized businesses expressed concern over funding arrangements, with a third saying they can’t continue trading for longer than six months, said the report.

Two out of five respondents reported the same or an increase in revenues compared to the same time last year.

Over half of those surveyed said they have either partially or fully reopened their offices or place of work.

Paul Eagland, managing partner at BDO, said: “These figures highlight some of the very tough challenges and decisions businesses are faced with.

“The leisure and hospitality sector, in particular, is facing the double-whammy of both the furlough support and Eat out to Help Out schemes ending.

“The Government took bold action with its furlough policy which has undoubtedly saved many jobs and businesses.

“However, the harsh reality is that these are unprecedented times and we would encourage the Government to introduce policies that will help UK business survive and ultimately compete internationally.

“Other governments around the world are and will be introducing policies to protect their businesses.

“We must not fall behind, particularly with Brexit looming.”

In the Make report, almost one in four respondents disagreed with the Government’s decision to end the scheme, saying it should be extended to critical sectors.lmost one in four respondents disagreed with the Government’s decision to end the scheme, saying it should be extended to critical sectors.

Make UK said an extension could help avoid a second wave of redundancies which the survey shows are in the pipeline.

More than two-fifths of companies surveyed said they have already cut jobs, while almost a further third revealed they intend to in the next six months.

The aerospace and automotive sectors are those most in need of an extension, said Make UK.

Chief executive Stephen Phipson said: “The protection of key skills should be a strategic national priority as this will be the first building block in getting the economy up and running.

“Ensuring that those sectors which are at the forefront of technology and will provide the growth sectors and high-skill jobs in recovery should receive the greatest support possible.

“The starting point for this should be an extension of the Job Retention Scheme to those sectors which are not just our most important but who have been hit hardest.

“Failure to do so will leave us out of step with our major competitors and risk a loss of key skills when we can least afford to do so.”

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