Millions still furloughed as scheme heads towards its end

The number of furloughed workers fell by a quarter between May and June, but the Government’s scheme is still supporting millions of employees, according to a new study.

The Resolution Foundation said the number of furloughed workers peaked at 8.9 million in early May, falling to 6.8 million by the end of June.

The number of fully furloughed workers continued to fall sharply in July and August, as the economy continued to reopen and partial furloughing was introduced, said the think tank.

The Job Retention Scheme (JRS) is being wound down, and will end in October, raising fears of an increase in job losses.

The Resolution Foundation said its study highlighted how sectors such as hospitality had been hardest hit, with 96% of pubs and similar companies making use of the JRS, compared with just 9% of non-specialised retail stores such as supermarkets.

The Foundation said rather than ending the JRS altogether, or maintaining it in its current form after October, the Chancellor should focus the scheme on hardest-hit sectors and make sure it subsidises the wages of those returning to work, rather than staying off.

Nye Cominetti, senior economist at the Resolution Foundation, said: “The Job Retention Scheme has played a critical role in protecting firms and workers from the worst of the economic crisis, with almost nine million workers furloughed at its peak in early May.

“The good news is that the number of fully furloughed workers has fallen substantially since early May as the economy has gradually reopened.

“However the fact that 6.8 million workers were still furloughed at the end of June, with hard-hit sectors such as hospitality still operating well below capacity, highlights the scale of redundancy risks workers face as the scheme is wound down by the end of October.

“The immediate priority for the Chancellor should be to bring forward further targeted support to these sectors.

“Otherwise, the significant policy success of the retention scheme will be followed by a big post-furloughing unemployment spike this autumn.”

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