Almost half of UK firms to put staff on furlough next week
Some 47% of UK firms are planning to furlough at least half of their workforce in the next week, as lockdown measures continue to take a toll on companies’ finances.
The job retention scheme, announced by the UK government in light of the coronavirus pandemic, enables companies to continue employing people who otherwise have been laid off. The government will cover 80% of their salaries up to a ceiling of £2,500 a month to ensure people whose job has been temporarily suspended can continue to be paid.
Many firms have already announced plans to use the scheme, including budget clothing retailer Matalan, low-cost airline group EasyJet and newspaper The Evening Standard.
According to a report from the British Chambers of Commerce, the majority of UK firms will face a cash flow crisis due to the coronavirus. Some 18% of the companies surveyed reported less than a month’s worth of cash in reserve, while 44% reported only one to three months’ worth of cash in reserve. Just 6% of firms said they had enough cash to survive the next 12 months.
As a result, 32% of respondents said that they were planning to furlough large swathes of their workforce over the next week, ranging from 75% to 100% of employees. More than a quarter of firms were not due to use the scheme in the next week.
Encouragingly, 61% of firms knew details of the business rates holiday for the retail, hospitality and leisure sector, and while the number of companies actively in receipt of this support was low, this is expected to rise in the coming weeks.
Commenting on the figures, BCC director general Adam Marshall said: “The coronavirus pandemic has taken a heavy toll on business and economic activity across the UK.
“While businesses have welcomed the unprecedented size and scope of the government support packages, our findings highlight the urgent need for that support to reach businesses on the ground as soon as possible. The majority of firms cannot wait weeks or months for help to arrive.”
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