The Chancellor, Rishi Sunak, has announced that the furlough scheme, currently due to end on 30th April 2021, will be extended until 30th September 2021. Here’s what you need to know.
The Job Retention (furlough) Scheme was originally established in March 2020 to assist organisations with retaining staff throughout business restrictions put in place as a result of the coronavirus pandemic.
Since then, it has been extended numerous times in response to the developing situation with the virus. Now, with plans for reopening businesses and the wider economy over the next few months being outlined across the UK, the government has confirmed that the scheme is to be extended again, this time until 30th September 2021.
How the extended furlough scheme will work
As before, furloughed workers will still get 80 per cent of their wages for the time in which they do not work, subject to a monthly maximum (currently capped at £2,500). However, from July, the government will start reducing their contribution to the scheme, similar to the way they started to phase it out last year before it was extended at the end of October.
From July 2021, the government will contribute 70 per cent of wages for unworked hours, with organisations asked to provide the remaining 10 per cent. In August and September 2021, the government will contribute 60 per cent, meaning organisations must provide 20 per cent.
If all goes to plan, this news means that the furlough scheme will remain an option for eligible organisations even after the lifting of all lockdown restrictions in England on 21 June – something that may occur sooner in Scotland and Wales but has yet to be confirmed.
Presumably, this is to assist organisations in gradually working towards pre-pandemic normality whilst also allowing for any delays to England’s roadmap out of lockdown that may occur if the government’s tests for easing restrictions, at any stage, are not passed.
Other important updates
The government have also announced two new training schemes designed to help small businesses become more productive. These are:
- Help to Grow Management – offering world class management training with mentoring and with the Government covering 90% of the cost
- Help to Grow Digital – offering small firms free training and 50 per cent discount on software.
Enrolment for both schemes will be open in the near future and we will provide further information on these schemes once information is released.
Employers taking on new apprentices of any age will see the incentive payment double to £3000, and £7 million will be made available for a new “flexi-job” apprenticeship programme in England that will enable apprentices to work with a number of employers in one sector.
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Find out more about the Furlough Scheme here.