Treasury remains tight-lipped on furlough flexibility

18-Jun-2021 - Last updated on 18-Jun-2021 at 15:24 GMT

Financial support: night-life bosses have said a 'crisis' is approaching as bosses will be expected to contribute 10% of furlough costs despite ongoing closures (image: Getty/Tomas Sereda)

The Treasury has been reticent to confirm whether it is considering excluding some businesses from the upcoming changes to the Coronavirus Job Retention Scheme (CJRS).

Employers will have to pay 10% of the costs in July and 20% in August and September despite operators’ crushed hopes about reopening this month.

Night-life bosses have called for flexibility after the Prime Minister announced a four week delay to the lifting of pandemic restrictions and pushed back the reopening of nightclubs until 19 July.

The Night-Time Industries Association called for the exclusion of closed businesses from proportionate furlough contribution and said one in four of its members believe they will not survive longer than a month without further support.

A Treasury spokesperson stressed the support available for businesses when asked by The Morning Advertiser (MA) about the possibility of sector-specific amends.

Long support

They said: “The furlough scheme is in place until September – we deliberately went long with our support to provide certainty to people and businesses over the summer.

“To date, the furlough scheme has supported over 11.5m jobs at a cost of nearly £65bn.

“The number of people on the furlough scheme has already fallen to the lowest level this year with more than a million coming off the scheme in March and April – showing our Plan for Jobs is working.

“Businesses can continue to access other support including business rates cuts, VAT cuts, and our Recovery Loan scheme.”

A delay to the roadmap would not necessitate further support for night-life businesses as the 21 June date was always billed as just the earliest date for scrapping restrictions and never certain, The MA understands.

Support measures

The Government stance is that generous support - including discretionary funding via local authorities - is already in place for businesses after Chancellor Rishi Sunak extended support measures including furlough beyond 21 June.

The commercial eviction ban was extended for nine months until 25 March 2022 after Treasury secretary Stephen Barclay told MPs that the roadmap delay "presents additional challenges" for businesses.

The furlough scheme sees the Government cover 80% of a staff’s wages for hours not worked, up to a cap of £2,500 per month, until the end of September.

Operators are already paying National Insurance and pension contributions towards the CRJS.

Chancellor Sunak’s Budget announcement of the gradual easing of support was met with concern from trade bosses.

Inevitable crisis

“It will place unnecessary pressure on fragile businesses just as they are beginning to get back to their feet,” UKHospitality boss Kate Nicholls said in March.

Night-time economy adviser for Greater Manchester, Sacha Lord, described the approaching additional costs as “a clear and inevitable crisis about to take place” given that “huge parts” of the nightlife sector remained closed.

He explained: "As of the end of the month, we'll not only see a 10% increase in furlough contributions, but the relief rate for hospitality drops from 100% to 66%.

"Factor in that huge parts of the nightlife sector are not even open yet, and we have a clear and inevitable crisis about to take place.”

Lord and the NTIA are readying themselves to launch a legal attack on the Government in the event that the removal of restrictions is delayed beyond 19 July.