‘Many thousands’ face losing their jobs as the Government’s furlough scheme is wound down again from today.
One in five firms plan to make staff redundant as financial support ebbs away, according to the British Chamber of Commerce (BCC).
The Coronavirus Retention Scheme helped to keep millions of workers afloat by paying 80% of wages, capped at £2,500.
But from Sunday, August 1, the Government will now only provide 60% of salaries subsidised by the state – with bosses now expected to pay the remaining 20%.
The Treasury’s contribution was slashed to 70% on July 1, with employers picking up the remaining 10%.
Bosses have the option of topping up wages to 100% at their own expense, according to Government policy paper, Changes to the Coronavirus Job Retention Scheme.
The financial support is slowing being tapered off as Chancellor Rishi Sunak hopes to scrap the scheme by September 30 this year.
Extra training will be required to help ‘many thousands’ laid off during the pandemic, the BCC said.
More than 5million people were on furlough during the lockdown in January this year.
Around 1.9million people were still furloughed by the end of June – a drop from 2.4million a month earlier, according to official data.
People aged 65 or over are said to make up the highest proportion of staff still on the furlough scheme, according to HM Revenue and Customs – amid fears older workers may find it difficult to find new jobs, the BCC said.
Head of people policy, Jane Gratton, said: ‘Today’s changes to the furlough scheme will likely result in many thousands of people being released back into the labour market, as employers who are still struggling to recover from the recession are forced to make redundancies and cuts to working hours.
‘With widespread skills shortages across the economy, some will find new jobs where their skills are in demand, while others will need to retrain for opportunities in a different sector.’
It is ‘crucial’ staff are given support and training necessary to be ‘re-engaged and productive’, Ms Gratton added.
She also urged the Government to expand its Kickstart scheme –designed to help young people at risk of long-term unemployment – to enable older workers to gain new skills and experiences.
A survey of 250 businesses with furloughed workers by the Chamber found 18% were likely to lay off staff in response to having to contribute more towards their wages.
A quarter warned they would slash hours or make staff part time.
And around 15% told how they would have to cancel investment.
However, 40% said the change would not impact their business.
The research took place between July 5 and 23.
The treasury said it had ‘always been clear’ that it is not ‘possible to save every job’.
A Government spokesman said: ‘We deliberately went long with our support, with furlough in place all the way through to the end of September, and three million workers coming off the scheme since March.
‘As the economy rebounds, it’s right that furlough support is tapered, so that we can focus support elsewhere.’
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