Furlough scheme gets four-month extension

Published:  12 May, 2020

Garages could keep staff on furlough until October now, although more flexibility from August will mean businesses begin to share the burden, while also beginning to bring people back in part-time.

Chancellor Rishi Sunak announced today (Tuesday 12 May) a four-month extension of the Coronavirus Job Retention Scheme in parliament.

This is the second time the scheme has been extended. It was originally scheduled to run until the end of May, but the cut-off was then moved to the end of June. It will now run until the end of October, tapering off as it goes.

The Chancellor confirmed that workers would keep getting 80% of their monthly wages, up to £2,500. However, he also said employers will be expected to pay a portion of the cost from August. The added flexibility in the scheme will mean companies will be able to bring their staff back in part-time.

"I'm extending the scheme because I won't give up on the people who rely on it,” the Chancellor said. “Our message today is simple: we stood behind Britain's workers and businesses as we came into this crisis, and we will stand behind them as we come through the other side."

The move has been supported by industry. “We welcome the Chancellor’s update and extension to the furlough scheme, which will allow businesses to bring staff back to work on a part-time basis.” said IGA Chief Executive Stuart James.

The IGA wrote to the Chancellor on 29 April requesting urging greater flexibility in the furlough scheme in order to allow employees to return to work part-time to support businesses as they look to re-open or ramp back up to full strength.

Stuart continued: “We thank the Chancellor for listening to the IGA’s proposal to implement a flexible furlough scheme. As highlighted in our letter, many independent garages have suspended activity since the coronavirus crisis escalated due to the decrease in work volumes caused by lockdown restrictions and the MOT extension.”

He added: “This support from the government will help independent garages with a gradual, stable approach when reopening.”

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