Over the month of June, over half a million workers in the UK have moved off the scheme as employer contributions are set to rise from August.
New research published by Her Majesty’s Revenue and Customs (HMRC) has revealed that there are the fewest number of people on the Coronavirus Job Retention Scheme (CJRS) since it launched in March 2020.
During the month of June alone, data reveals that around half a million people have come off the scheme as it prepares to wind down in September.
This means that figures have dropped from 2.4 million workers on the furlough scheme at the end of May to now just 1.9 million.
In addition to this, it has been young people who have moved off the scheme fastest, with this age group moving twice as fast as all other age groups.
However, for employees aged 65 or over, this group had the highest proportion of employments on furlough – around 10 per cent of eligible employments in the age group.
Sectors which were badly affected at the start of the pandemic – including hospitality and retail – are also now shown to be bouncing back with the lifting of COVID-19 restrictions.
Over a million people from both sectors came off the furlough scheme over the last quarter, meaning staff in hospitality and retail no longer make up the majority of all those on furlough.
Instead, at present, the industry groups which have the highest percentage of staff on furlough include passenger air transport (58 per cent), travel agency and tour operator activities (49 per cent) and photographic activities (39 per cent).
Additionally, London was shown to have higher levels of staff on furlough compared to the rest of the country, including boroughs such as Newham, Hounslow, Barnet and Redbridge.
These figures come as employer contributions are set to change once again from August.
This means employer contributions will be set to increase from 10 per cent in July to 20 per cent in August for hours not worked. As such, Government contributions will fall to just 60 per cent as the scheme prepares to wind down at the end of September.
Chancellor of the Exchequer Rishi Sunak commented on these findings:
It’s fantastic to see businesses across the UK open, employees returning to work and the numbers of furloughed jobs falling to their lowest levels since the scheme began.
I’m proud our Plan for Jobs is working and our support will continue in the months ahead.
Rebecca Thornley-Gibson, Partner at DMH Stallard, discussed what these figures could mean in practical terms after the scheme ends:
A combination of the availability of COVID safe workplaces, continued success in vaccination take-up and a need to reintegrate employees into the workplace, is now resulting in employers moving away from Government support in an effort to align resource with current and expected post pandemic requirements.
Those employers who are still using furlough may be fearful of a cliff edge scenario from 1 October when furlough support ceases.
If there is insufficient income generating work for employees from October 2021, employers may need to consider redundancies or alternatives such as unpaid leave and salary reductions.
Whilst official figures suggest redundancies have decreased the position remains precarious for employees still furloughed and it is probable a spike in redundancy dismissals will be seen mid September onwards for those employers who have not adapted resource levels over the last 12 months to current need.
*These findings are documented in HMRC’s most recent ‘Coronavirus Job Retention Scheme statistics: 29th July 2021’.
Monica Sharma is an English Literature graduate from the University of Warwick. As Editor for HRreview, her particular interests in HR include issues concerning diversity, employment law and wellbeing in the workplace. Alongside this, she has written for student publications in both England and Canada. Monica has also presented her academic work concerning the relationship between legal systems, sexual harassment and racism at a university conference at the University of Western Ontario, Canada.
