Fine-tune furlough to help those most at risk, says chamber

Suzanne Caldwell
X The Business Desk

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Chamber chiefs have expressed concern for businesses following a change in the Government’s furlough scheme this week.

They are calling on the Government to tailor packages to focus on specific areas of the economy in most need.

A North West regional break down of the British Chambers’ of Commerce latest Net Zero and COVID-19 Reopening Survey 2021 shows that 73% of businesses in total will have to either make staff redundant, reduce staffing hours, scrap any recruitment/investment plans, or seek further external support to survive.

From Sunday, August 1, businesses now have to pay a minimum of 20% of their furloughed workers’ salaries while the Government covers 60%. As before, while on furlough, employees only get 80% of their usual salary unless their employer wishes to top it up.

The data highlights:

  • Only 55% of businesses are currently running at full capacity
  • A total of 27% of businesses predict they still won’t be running at full capacity into early 2022
  • Around a quarter of all businesses have been unable to prepare for changes to COVID-19 restrictions based on the Government’s guidance
  • A mere 36% of all businesses have found the COVID-19 grant schemes effective

Suzanne Caldwell, managing director of Cumbria Chamber of Commerce, said: “For the majority of those businesses in need, the financial assistance has been insufficient.

“While we appreciate there was an impetus to move quickly at the beginning, there has been ample time since the start of the crisis to agree and implement more suitable, tailored packages and levels of support that focus on those with real need at an appropriate level.”

She added: “There is a general mood being portrayed that most, or all, of the economy are back to business as usual and it is important for us to highlight that this is just not the case.

“That said, this is not entirely down to COVID per se, with staff shortages, whether due to COVID and the pingdemic or not, having a significant impact on levels of trading.

“We’re aware from HR professionals that businesses are still utilising the furlough scheme, especially for staff when they are having to self-isolate.

“But at the same time, we’re receiving reports from businesses of staff refusing to return from furlough and staff having taken up other jobs while also receiving furlough payments.

“The Government needs to look again at furlough and other support and make sure the support is there where there is genuine need, while at the same time getting people off furlough and back into the jobs which have been held open for them.

“If those jobs no longer exist, there are hundreds of employers desperate for staff.”

The latest Net Zero and COVID-19 Reopening Survey 2021 took place between July 5-23, and is the most recent national economic indicator involving thousands of businesses across the UK.

On a national level, the sector most reliant on the furlough scheme is now the culture, arts and night time economy, overtaking hospitality and tourism.

But in Cumbria, hospitality and tourism businesses are still those most active in utilising the furlough scheme – despite the sector being desperate for staff – followed by retail and other customer service focused businesses.

While some Cumbrian areas, such as South Lakeland and Eden have seen the sharpest fall in those using the furlough scheme, down by 44% and 43%, respectively, those areas were also the most reliant earlier in the year.