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Contributions rise

One in five firms plans job cuts after furlough change

Older worker

Older workers are more vulnerable

One in five companies is considering staff redundancies as they are expected to pay more towards wages.

From today employers’ contributions to furloughed staff rises to 20% from 10% payable since 1 July Since 1 July for hours their staff do not work. The scheme is due to end completely at the end of next month as the economy returns closer to normality.

Currently about 1.9m workers are on furlough, down from a peak of 5.1m in January.

The BCC quizzed 250 firms with 18% saying they were likely to make staff redundant in response to the change to the furlough scheme.

A quarter (24%) said they would reduce hours or move staff to part-time working patterns, while 13% said they would cancel or reduce recruitment or investment plans.

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The survey follows HMRC data released earlier this week showing older workers were far more likely to remain furloughed than younger ones.

The BCC said this raises concerns about what plans are in place to re-skill those who are left without jobs as the scheme winds down – with skills shortages continuing to bite across the UK labour market. 

Jane Gratton, head of people policy at the British Chambers of Commerce, said:  “Today’s changes to the furlough scheme will likely result in many thousands of people being released back into the labour market, as employers who are still struggling to recover from the recession are forced to make redundancies and cuts to working hours.  

“With widespread skills shortages across the economy, some will find new jobs where their skills are in demand, while others will need to retrain for opportunities in a different sector.   

“Whether furloughed workers are returning to the workplace or the wider labour market, it is crucial that employers and the government give them the support and training they need to be re-engaged and productive.

“Alongside rapid retraining opportunities, government should extend the Kickstart scheme into 2022, and expand it to enable older workers to gain new skills and experience.” 



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