Sunak to announce furlough cut-off this week

The chancellor is set to announce a series of changes to the government’s coronavirus support schemes later this week, with a focus on phasing out the Jobs Retention Scheme.

Rishi Sunak is expected to reveal new measures to stop companies from furloughing additional employees working full-time to bring them back on a part-time basis.

According to the Financial Times, the Treasury is also looking to set a cut-off date after which no-one will be able to join the scheme.

It has been suggested that Sunak may also reveal the level of employer contributions the Government will expect from August.

According to the Times, the draft plans being worked on are expected to require an employer contribution of 20% from 1 August, with the Government paying the remaining 60% of the furloughed employee’s salary.

Just last week, MCA Insight/HIM’s latest Hospitality Leaders Poll revealed that in the hospitality industry, 41% of operators say they won’t be able to contribute a penny to the JRS unless they are operating at full capacity by then.

“Our ability to top up Furlough is based on our income,” said one multi-site operator. “We won’t be able to start paying 20% of the salaries of people furloughed unless there’s enough income to pay the bills. In this scenario, we will look at the redundancy routes for excess numbers, and recruit as we ramp up when we do need the numbers.

“We will be able to afford to top up salaries and operate at a more robust level if something like the National Time Out campaign is successful as our rents in London are the number one fixed cost and therefore the fundamental issue with not being able to trade as before.”