The furlough scheme, also known as Coronavirus Job Retention Scheme (CJRS) is further extended until the end of April by the UK government. The scheme that supports workers and staff in the wake of the coronavirus pandemic contributes 80% towards wages.
With the extension of the scheme, the businesses will continue to take pandemic related benefits to survive until April. The virus hit tumbling businesses will avail generous government offered loan schemes until March next year.
Chancellor Rishi Sunak, while making the announcement, said that the scheme extension is given “to support businesses and employees” and bring “certainty into the new year.”
The scheme is more generous for employers
Under the scheme, employees will continue to receive 80% of their current salary as they don’t have to work. Also, the cost for employers who are working with their workers retained is reduced. This indicates that the current scheme is more generous for employers as compared to the period of October.
Closed businesses will receive grants
The businesses forced to shut down by the government in England will receive generous grants up to £3,000 per month. The grant will be extended under the Local Restrictions Support Grant. The government is also giving £1.1bn to the local authorities for one-off payments to support local businesses. This amount will be distributed on the basis of £20 per head.
Huge spending under furlough scheme
Official data showed a huge sum of the amount that the government is spending on the furlough scheme. The number is reached £46.4bn. Millions are on still leave under the scheme. The data published by the Office for National Statistics (ONS) states that 15.5% of the workforce is still on leave, which calculates to over five million people.
The scheme so far protected about 9.6 million jobs. Treasury Department says that £68bn is provided so far to the struggling businesses under the government’s loan schemes.
How the extension will affect businesses
Millions of people across the UK are still under the furlough scheme, and the extension will keep the jobs alive for more than a year.
Initially launched in April, the scheme covered 80% of the businesses’ wages, which made claims. Later, the percentage was gradually reduced to 60% in October.
As the scheme is renewed, the newly-extended scheme came into force from November and will cover 80% of wages, and it will continue at this level until the spring of next year.