Cost of Government’s furlough scheme set to soar as two-thirds of smaller firms apply for taxpayer money to pay wages
The cost of the Government’s furlough scheme is set to soar as two-thirds of smaller firms have applied for taxpayer money to pay staff wages.
The latest coronavirus business impact tracker from the British Chambers of Commerce (BCC) showed 66 per cent of respondents have furloughed employees and are waiting to claim their pay when the scheme goes live next week.
The Office for Budget Responsibility this week suggested the scheme would cost the Government £42 billion for the first three months, or £467m a day.
Costly: The latest coronavirus business impact tracker from the British Chambers of Commerce showed 66 per cent of respondents have furloughed employees
But the Confederation of British Industry estimates around 10m people have already been put on furlough – more than pencilled in by the OBR.
And the BCC’s numbers show that almost a third of smaller companies had furloughed between 75 per cent and 100 per cent of their staff, again raising the prospect of even higher takeup of the scheme.
The scheme allows companies to claim 80 per cent of staff wages up to £2,500 a month from the Government for employees who can no longer do their job because of the lockdown. This allows companies to hold on to their staff rather than make them redundant.
The Treasury last night extended the cut-off date for the coronavirus furlough scheme to cover thousands more workers at risk of losing their jobs. Employers can now claim for furloughed employees who were employed on their PAYE payroll on or before March 19 – the day before the scheme was announced.
Individuals originally had to be employed on or before February 28, 2020 to qualify for the Coronavirus Job Retention Scheme.
The Treasury estimates the change will benefit more than 200,000 employees.