Business confidence tested as furlough scheme closes

Last week saw the end of the Furlough Scheme, which has protected millions of jobs over the duration of the pandemic. Paying 80% of workers’ wages at its highest point with nearly 9 million employees signed up, the scheme was part of the largest business support package the UK has ever seen.

Businesses have relied upon this scheme to support their business survival and prevent huge numbers of staff redundancies. Without the unprecedented support package, businesses would have no doubt been forced to let staff go and face staff and skill shortages when restrictions were lifted.

Recent figures showed 1.6 million people were still on furlough at the end of July with 1 million of those expected to still be on the scheme at the end of September. As the scheme has now ended businesses will face a tough decision on whether they can afford to keep those staff members or if they will have to let them go. It is predicted that there will be a small rise in unemployment because of the scheme ending.

The coming months will be the biggest test of the true recovery and strength of the UK economy and just how much confidence businesses have managed to regain since restrictions were lifted. Government will need to look at how it can further support businesses who may now still struggle to keep their staff and ensure those who will be looking for work, find alternative employment as quickly as possible.

The Chamber will continue to support businesses through this time, I am sure that the resilience and determination shown over the past 18 months will carry Herefordshire and Worcestershire businesses through a testing time where support continues to wind down and business confidence is tested.