Furlough scheme extended until September

It has been confirmed that the government’s Coronavirus Job Retention Scheme, or furlough scheme, will be extended until the end of September.

The extension of the scheme has been one of the top priorities for the sector as it was originally due to end in April, before many businesses including hotels would be able to reopen. The scheme has seen the government pay 80% of furloughed staff wages, while employers pay National Insurance and pension contributions.

However, it is understood businesses will be expected to contribute to the scheme from the end of July.

UKHospitality chief executive Kate Nicholls said: “Extending the full scheme up to and beyond the point of full reopening of the sector is a welcome move. It will help keep businesses afloat and more jobs secure as they trade their way back to prosperity in the years to come. This means it is more important than ever that the government sticks to its plan to allow full reopening of venues on 21 June.

“Expecting businesses to contribute to the scheme from the end of July is a worry, though. It will place unnecessary pressure on fragile businesses just as they are beginning to get back to their feet. It is also very disappointing not to have employer National Insurance Contributions removed from the scheme. Businesses are burning through their cash reserves and many will have exhausted them before they have a chance to reopen. Not all businesses are going to be out of the traps instantly. It will take time for them to reopen and they will be racking up costs in the meantime.

“It is now more important than ever that the chancellor delivers a wider package of support in his Budget statement. Extended furlough alone will not be enough to give businesses the support they need to survive the spring and summer, particularly if businesses are now incurring additional costs. We must have an extension of the VAT cut and business rates holiday if we expect to see businesses survive and thrive after the crisis has passed.”

Michael Kill, chief executive of the Night-Time Industries Association (NTIA), said: "Extension of furlough until September beyond the proposed reopening date for night-time economy is a positive move by government. This will go a long way to safeguarding sector jobs until we are able to re open, allowing a level of flexibility through the phases of market re engagement”

“We hope that the initial announcements from government on the budget will set the tone for further positive news in support of businesses, which without support will be unable to deliver the furlough scheme which has protected millions of jobs during the pandemic”

Photo: Flickr HM Treasury