Shropshire business leaders welcome furlough extension
Business leaders across Shropshire have welcomed the Government's decision to extend the furlough scheme until the end of March.
They say it will give struggling businesses some "breathing space" and help them to maintain their staff during the uncertain months ahead.
Mandy Thorn MBE, chair of the Marches LEP, said the furlough scheme had been vital life support for many of businesses in the region, particularly those in the visitor economy.
More Covid-19 coverage:
“This new lockdown, particularly with Christmas only weeks away, will certainly present a serious challenge to the survival of many of our retail, tourism and leisure businesses. The LEP is working closely with the Government and local authority partners to ensure that businesses across this region have access to the support on offer, which includes grants which will help to keep many of those businesses afloat.
“Extending the furlough scheme, as the Chancellor has announced, will give many of them much-needed breathing space. It will also give employees some peace of mind that they can keep their jobs and retain at least the majority of earnings in the coming weeks.”
Recognised
Richard Sheehan, chief executive of Shropshire Chamber of Commerce, said: "This is a welcome and positive step for businesses.
"The Government seems to have recognised it takes time for businesses to get up to speed when we come out of lockdowns.
"Businesses are obviously made up of employees which are important assets and this additional support will help them to maintain their assets where their purse strings might not have allowed.
"On the negative side, the level of support from a cash flow perspective is woefully short of where it needs to be. This needs to be addressed and will be a key focus for all chambers of commerce."
Legal employment expert Julia Fitzsimmons, partner with FBC Manby Bowdler, said: “Many businesses have been forced to make decisions which at the start of 2020 would have seemed unfathomable. And many employers have known for a long time that without the furlough scheme, they may struggle to keep on their staff.
Lifeline
“But the Chancellor has given a lifeline to employers and to millions of workers who may already have been aware they could be unemployed in the coming weeks, potentially even just before Christmas. There’s no doubt that this by offering this extension, redundancies will be avoided. However, it is still a sticking plaster for many businesses and long-term, employers face tough decisions ahead in order to keep their businesses alive.”
John Merry, head of employment at Lanyon Bowdler Solictors, said: "The Job Support Scheme, that was originally to replace the current furlough scheme with a more limited level of support for employers and their employees, and to run until the end of April 2021, is now very much on the back burner.
"I had feedback from businesses who had been furloughing employees to the end of October, when the furlough scheme had been due to end, that the Job Support Scheme would be of no use to them. Certainly, we saw more and more employees made redundant as the end of October approached, who the envisaged availability of the Job Support Scheme did not save.
"We saw a lot of employees whose employment ended shortly before the furlough scheme was first introduced in March being re-employed and placed on furlough. It is open to employers to do the same now with employees whose employment ended since September 23, and so I would expect to see something of a repeat of that – although not to the same extent as in the spring, given that this time employers will have to pay the national insurance contributions and minimum auto-enrolment pension contributions of furloughed employees.
"We were seeing much reduced use of furlough by employers by October, with many employers having made a decision either to bring employees back to work or make them redundant by then. Obviously, the subsequent return to the forced closure of business premises under Covid-19 restrictions has brought with it a renewed need for the practice – although this is to a lesser extent than during the virus’s first wave, as more businesses are able to continue operating, having adopted Covid-secure practices in workplaces and other measures, such as being able to better accommodate home working.
"We saw that many employers did not implement furlough arrangements correctly first time around – including failing to consult or otherwise act correctly in modifying contracts, where required, or otherwise to properly record arrangements in writing. Those employers are encouraged to take better care if they are to utilise the extended scheme."
Shropshire Business Board chairman, Paul Bennett, who is also an employment and partnership solicitor at Bennett Briegal LLP, also welcomed the extension.
He said: “The Shropshire Business Board welcome this practical support for businesses. Certainty in an uncertain health pandemic is critical. This will save jobs in Shropshire and beyond. Many of our employers locally are smaller and therefore the scheme has already had a huge impact. As we are in the third quarter for many businesses with a year end in March 2021 and in the run up to the crucial pre-Christmas trading period this certainty around furlough is a huge relief for Shropshire Businesses because it gives them time to recover some lost income and enables them to preserve jobs.
"We know further support has been indicated and will keep businesses updated as soon as details emerge either on our own website https://www.shropshirebusinessboard.uk/news or through the Marches LEP website as one of their key partner for the region.”
Mr Sunak said the Government's highest priority remains "to protect jobs and livelihoods".
He had previously extended the furlough throughout November due to the second national lockdown in England.
The Chancellor told the Commons: "We can announce today that the furlough scheme will not be extended for one month, it will be extended until the end of March.
"The Government will continue to help pay people's wages up to 80 per cent of the normal amount.
"All employers will have to pay for hours not worked is the cost of employer NICs and pension contributions.
"We will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more."
The move comes after the Government continually resisted pressure to extend the furlough scheme which was originally supposed to end in October.
