'Rethink end of furlough' | Sunak urged to reconsider as £500m 'employment fix' launches

Sunak urged to reconsider as £500m 'employment fix' launches

A new £500 million support scheme is set to help workers coming off furlough, as the Government bids to ward off an unemployment crisis.

Chancellor Rishi Sunak is set to unveil the new scheme at the Tory party conference in Manchester this Monday, October 4th, following the official end of the Coronavirus Job Retention Scheme last week.

As reported by The Guardian, the new measures will include prioritising those coming off furlough for one-to-one support from jobcentres and extending until 31 January the £3,000 incentive for employers to take on apprentices.

Sunak is expected to say he is “doubling down” on his pandemic pledge to do “whatever it takes” to support people through the crisis. According to The Guardian, Sunak will also announce further plans for investment in the nation's infrastructure and skills network, including tech.

"We are going to make this country not just a scientific superpower, not just the best place in the world to do business, I believe we’re going to make the UK the most exciting place on the planet,” the Chancellor reportedly plans to say.

The Coronavirus Job Retention Scheme (CJRS) was introduced in March 2020, days before the first national lockdown began, after the Government forced all non-essential businesses to close. It helped pay the wages of more than 11.6 million Britons who were unable to work during the pandemic.

Experts weigh-in on Sunak’s new plans

Despite many accepting that keeping furlough going was not sustainable for the UK Government, there were also cries for some form of continued support in another way, shape or form.

Sabby Gill, CEO at Thomas International, told HR Grapevine: “The furlough scheme has - and should - come to an end. It’s achieved its purpose and our economy cannot afford for it to go on any longer.

“The government needs to target those areas that are still struggling, like hospitality and care, and offer industry relief and support packages - not every business is back to pre-pandemic levels.

“While ten million people have successfully transitioned off the scheme, more than a million UK workers still face uncertainty this week. Although there are currently around a million vacancies open, there is a clear mismatch between the skills of those looking for jobs, and the number of jobs requiring skills lots of people don’t have. Take lorry drivers as the most recent example.

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“The government must provide support to re-skill previously furloughed staff into areas where there are huge levels of demand and open vacancies.

“Empathy from bosses is also crucial. Anxieties will naturally be high this week as people come off furlough. Some haven’t worked in over a year. These workers must be given added support to manage the transition back into work with ease. The workplace is a very different place from what it was two years ago, and mental health needs to be a top priority.”

Lee Purvis, CEO of TheJobApp, told HR Grapevine: “The chancellor’s commitment of £500m to renew job support programmes will hopefully help address and offer some help to the huge issues in the job market caused by the skills shortages in the UK. However, his promise to reshape the jobs market around technology and innovation is much more exciting news as tech offers the long-term solutions to address the issues impacting so many businesses recruiting across the UK.

Ed Hussey, director of people solutions at accountancy firm, Menzies LLP, said:“This support package is welcome news for the many thousands of UK workers finding themselves out of work and without the support of the furlough scheme. The only question is, will it be enough to help them to find jobs, so they can at last get on with their lives?

“Businesses can play their part in helping people back to work, at the same time as strengthening their skills base, by taking advantage of the Government’s decision to extend the KickStart Scheme until March next year. This scheme is designed to benefit young people on Universal Credit and has been proving popular with both employers and workers.

"The decision to extend the £3,000 incentive for businesses taking on a new apprentice to the end of January 2021 could also help to fill skills gaps. Employers can maximise their subsidies and support by using the KickStart Scheme as a trial period for new employees, the best of whom can then become an apprentice, and there is lots of free support available for companies to navigate the process and maximise their benefits."

Hussey concluded: “The decision to extend the period of support is significant as it is clear that the pandemic is continuing to cause disruption for many sectors, at a time when households are being affected by rising costs. The measures announced are just for the short-term however, and there is a risk that the economic cliff-edge facing many households has just been pushed a bit further away.”

‘Furlough ending too soon’

Frances O’Grady, the TUC general secretary, said the end of the furlough scheme is coming too soon.

“Ministers should rethink the end of furlough. Many workers in hard hit industries are still furloughed and need support for longer. Otherwise, we may see a rise in unemployment,” O’Grady said, as reported by The Guardian.

The shadow work and pensions secretary, Jonathan Reynolds, also said: “The government’s struggling plan for jobs has failed to hit its original targets; it is not creating the number of jobs needed and has failed to address the supply chain crisis Britain is experiencing.”

The CIPD also weighed in, saying: “We welcome the extra support announced to help people find work and boost training by extending schemes, such as Kickstart and the apprentice incentive payments for employers, into 2022.

“However there do need to be other significant changes to skills policy, to really have an impact on skills and access to work. Improving the quality of careers advice for young people, reforming the Apprenticeship Levy and increasing investment to support life-long learning are also key areas for review and much needed investment.

“The Chancellor’s speech also left a large question mark over how the Government plans to help the UK transition to a high-wage, high skill economy and reduce the need for immigration to address rising skill and labour shortages.

“Greater investment in R&D, infrastructure and in high tech industries is part of the answer, but this needs to be supported by wider adoption of technology by employers across the economy supported by improvements in management capability and workforce skills development.

“There is a real need to build on the Plan for Growth to develop a long-term strategy that goes beyond limited small-scale interventions to one that seeks to enhance the business environment and supports business productivity improvement at a regional, sectoral and national level.”

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