Furlough levels have fallen by a third since January as retail and hospitality workers have started to return to their jobs, according to new government figures.
The new HMRC data, which gives a detailed breakdown of take-up of the Coronavirus Job Retention Scheme (CJRS) up to 30 April, also revealed that the cumulative take-up of the scheme had now reached the milestone of two billion working days.
However, the number of employees on furlough has continued to fall over the course of April as lockdown restrictions eased, with a fall of 880,000 over the month to reach 3.4 million (or 11.7% of all employees).
This latest fall means that furlough levels have fallen by a third (1.6 million) since the recent peak in January, when 5.1 million employees were on furlough.
The CJRS is set to end on 30 September but there have been calls by the Scottish National Party among others to extend it. While cabinet minister Michael Gove today (3 June) told the BBC he was open-minded about the suggestion, it has been revealed that the subject is set to be discussed at a virtual meeting between Prime Minister Boris Johnson and the leaders of devolved parts of the UK.
Nicola Sturgeon, Scotland’s first minister, warned that the meeting should not be viewed as a PR exercise by Johnson and that meaningful commitments on funding and progress should emerge.
The fall in numbers under the CJRS in April was driven by employees leaving furlough in retail and hospitality. The number of retail workers furloughed fell by 230,000 to just 600,000 (14% of employees in retail) by 30 April, down by two-thirds since its peak in 2020.
In addition, 180,000 hospitality workers left furlough in April. However, 930,000 hospitality employees (48%) were still furloughed at the end of April.The new ONS data suggested that the number of people on furlough fell to just over two million by mid-May – the lowest level since October 2020.
The ONS found that 83% of hospitality sector firms were now operating as opposed to 61% two months ago.
At 75%, the transportation and storage industry had the lowest percentage of businesses currently trading.
The sector with the highest proportion of workers still on furlough was the arts, entertainment and recreation industry where a quarter of the workforce were covered by the CJRS in late May 2021.
According to thinktank the Resolution Foundation, this latest rapid fall was very encouraging because, it said, the fact that there were three million employees still not fully back working at the end of April showed there was still the risk of a rise in unemployment later this year when the scheme ends.
Young and low-paid workers were likely to face the biggest risk of job losses – with furlough rates among 18-24 year olds 50% higher than among the over-50s (16% vs 10%) – while those still on furlough were heavily concentrated in low-paying sectors of the economy.
Senior economist at the Resolution Foundation, Dan Tomlinson, said the figures showed the huge scale of the pandemic’s impact and “how vital the furlough scheme has been in term of preventing mass unemployment”.
He added: “But with around one-in-six young workers still on furlough at the end of April, today’s figures are a stark reminder of the risk of rising unemployment when the furlough scheme ends. The government must do all it can to ensure those workers find work as quickly as possible.”