Furlough to be extended until September

Ahead of chancellor Rishi Sunak's 2021 Budget announcement later today (3 March), it has been revealed that the government's Coronavirus Job Retention Scheme will be extended until September. 

The news comes after the government also confirmed the Budget will include a new package of support grants of up to £18,000 per hospitality premises to facilitate the sector’s restart this summer. An additional £425m has also been added to the Additional Restrictions Grant fund to help those not receiving the grants.

With regards to the extension of furlough support for business, it is thought that companies will be asked to pay 10% of the hours their employees do not work in July, rising to 20% in August and September. The government will pay the remaining 80%. 

“Extending the full scheme up to and beyond the point of full reopening of the sector is a welcome move," comments Kate Nicholls, UKHospitality's chief executive. "It will help keep businesses afloat and more jobs secure as they trade their way back to prosperity in the years to come. This means it is more important than ever that the government sticks to its plan to allow full reopening of venues on the 21 of June.

“Expecting businesses to contribute to the scheme from the end of July is a worry, though. It will place unnecessary pressure on fragile businesses just as they are beginning to get back to their feet. It is also very disappointing not to have employer National Insurance Contributions removed from the scheme.

"Businesses are burning through their cash reserves and many will have exhausted them before they have a chance to reopen. Not all businesses are going to be out of the traps instantly. It will take time for them to reopen and they will be racking up costs in the meantime.

“It is now more important than ever that the chancellor delivers a wider package of support in his Budget statement. Extended furlough alone will not be enough to give businesses the support they need to survive the spring and summer, particularly if businesses are now incurring additional costs.

"We must have an extension of the VAT cut and business rates holiday if we expect to see businesses survive and thrive after the crisis has passed.”

Dine Out will be bringing you more news from today's Budget announcement as details emerge.