The number of people being furloughed on the government’s job retention scheme continues to rise, even as the UK begins to lift some restrictions on businesses.
HMRC tweeted on Tuesday that 8.7 million people had been furloughed by 1.1 million businesses across the UK as of Sunday. The programme has so far cost the UK government £17.5bn ($22bn).
The new figures mean 300,000 more people have been placed on furlough in just the last week. The rise comes despite some easing of lockdown restrictions. Open air markets and car showrooms were allowed to reopen from Monday (1 June), while non-essential retailers like clothes shops can start to re-open from 15 June.
The job retention scheme was announced in March as a way to prevent the COVID-19 lockdown sparking a wave of mass layoffs. Under the terms of the scheme, the Treasury pays 80% of staff salaries to a maximum of £2,500 per month. The idea is to keep people attached to employers without companies facing a huge financial burden. Many businesses faced a near total collapse in income as a result of lockdown.
The scheme has largely been a success but the lockdown has lasted far longer than the government initially expected, creating a headache for the chancellor Rishi Sunak. The cost the scheme is ballooning and the Treasury is now also keen to start encouraging people back, as part of a push to restart the economy. The worry is that the generous terms of the scheme will keep people sitting at home for longer than they need to be.
Sunak last week announced plans to taper off and wind up the job retention scheme. Employers will no longer be able to add new staff to the scheme after the end of June. Employers will also be asked to start contributing to wages of furloughed staff from August.
The scheme is set to end totally in October. Employers will be allowed to bring staff back part time while still using the scheme from July.
As well as support from salaried staff, HMRC said on Tuesday that the self-employed continue to make use of government support — 2.5 million self-employed have now claimed grants worth £7.5bn. That was up from 2.3 million self-employed last week. Sunak last week also extended support for the self-employed.