A minority of UK employers could be about to cut jobs, due to the withdrawal of the furlough scheme and rising costs.
The scheme, which has protected around 11.6 million jobs since the start of the pandemic, will close today on 30 September 2021. Whilst the furlough scheme was running the Government paid 60% of a furloughed worker’s wages and employers will pay 20%, plus workplace pension and National Insurance contributions.
By making furlough more expensive for employers, the Government hopes to encourage them to take workers back full-time, if they can. Some employers with workers on furlough might find that they cannot afford to keep them on as business returns to normal from 1 October 2021.
As a result, research from the British Chambers of Commerce (BCC) found that 18% of UK employers plan to make redundancies before the end of the year.
The UK introduced a kickstart scheme in September 2020 and it pays the wages and associated employment costs for businesses taking on 16 to 24-year-olds in receipt of universal credit for up to six months. While that scheme has yet to be extended at the time of writing, the Government has launched a new flexible apprenticeship scheme for the agricultural, construction, and creative sectors.
Organisations in these industries can apply for grants of between £100,000 and £1 million to set up new flexi-job apprenticeship agencies before the end of 2023/24.
If you would like to speak to a member of our team about managing costs in your business please contact us on 020 7330 0000.