CIPD calls on Chancellor to extend furlough scheme to the end of June to protect jobs

14 Dec 2020 01:58 PM

CIPD Chief Executive calls for joint package of job protection and training support to provide business stability and support individuals over the next six months of continued economic uncertainty 

Peter Cheese, Chief Executive of the CIPD, the professional body for HR and people development, has today written to the Chancellor of the Exchequer to make three crucial recommendations to protect jobs as the Covid-19 crisis continues. These are based on consultation with HR leaders in the UK who have been on the frontline of workplace decision-making in the pandemic. 

The CIPD is calling for: 

• First, for the Government to extend the scheme beyond 31 March to the end of June to help businesses plan and to continue to protect jobs against a very uncertain backdrop through the first half of the year. 
• Second, for the level of wage subsidy to remain at 80% for February and March given the vaccine roll-out programme will still be in its infancy and the trajectory of the virus uncertain over the next few months – it should then reduce to 70% in April and then remain at 60% for May and June 2021. 
• Third, for the next phase of the Job Retention Scheme to not just protect jobs, but create support to enable firms to train staff who are fully furloughed or working reduced hours and in particular, to provide funded outplacement skills development to any worker made redundant.  

Further to the full letter, Peter Cheese, CIPD Chief Executive, comments: 

“It is crucial that Government sets out a long-term plan to protect jobs beyond March, to help businesses plan with confidence and minimise the need to make more redundancies against an uncertain backdrop through spring and early summer.    

“Extending the Job Retention Scheme to the end of June will give businesses the certainty they need to protect jobs while the vaccine is being rolled out. In addition, linking the scheme to support for training will help upskill or retrain staff in sectors that have been particularly hard hit by the pandemic, and provide skills development help for workers who are made redundant over the period. 

“The Government will of course be concerned about the cost of extending furlough beyond March, but its calculations must take full account of the costs of not doing so. These include a significant increase in the number of people claiming Universal Credit, and reduced confidence and spending power in the economy at a time when both have never been needed more.  

“Jobs that are lost over this period are also likely to feed into long-term unemployment as recruitment and onboarding costs will mean cash-strapped employers will hesitate to hire permanent staff again until they are certain about the strength of the economy.   

“If we are to achieve economic and jobs recovery in the second half of next year, the Government must raise its ambition on job protection and investment in skills.”