Around 13% of UK workers were furloughed, whether fully or partly, at the end of December according to figures released by HM Revenue and Customs.
Throughout the last month of 2020, as the four governments of the UK increased restrictions before entering the current lockdown, an average of 3.85 million employments were furloughed under the Coronavirus Job Retention Scheme (CJRS).
This was slightly down from the November average of 4.05 million, but still much higher than October when it was 2.52 million.
During its peak in May 2020, around three-in-ten private sector employees – 8.9 million in total – were furloughed. ONS survey data published this week suggests furloughing rates have climbed higher still in January as the lockdown, including school closures, have been implemented across the country.
Workers aged 18-24 were most likely to have been furloughed in December – representing 17% of furloughed workers – while employers in hospitality (1 million), retail (0.7 million) and leisure (0.3 million) accounted for more than half of all furloughed staff.
The Resolution Foundation think tank said that while the retention scheme held back the tide of job losses during the pandemic, the planned winding down of furloughing on 30 April is expected to cause a fresh surge in unemployment, which will peak in the summer.
Business groups including the CIPD and CBI have called for the CJRS to be extended to June 2021, while the Institute for Employment Studies has gone further, suggesting the autumn.
Charlie McCurdy, researcher at the Resolution Foundation, said: “The Job Retention Scheme has been a living standards lifeline for millions of workers, with three-in-ten private sector workers furloughed at the peak of the first lockdown. And with the UK back in lockdown, over four million employees are likely to be on furlough right now.
“The winding up of the scheme in just three months’ time is expected to cause a fresh wave of unemployment. It’s vital therefore that the chancellor ensures a flexible transition out of the scheme, in order to avoid millions of workers simply moving from furlough straight into unemployment.”
Before Rishi Sunak extended the CJRS beyond the end of October 2020, businesses had been expecting the Job Support Scheme, a short-time working initiative. Whether this will be launched in May along with the £1,000 bonus for each previously furloughed employee still on the books three months after the CJRS ends, remains to be seen. In November Sunak said the bonus would be scrapped “for now” and replaced with a new job retention incentive that would be deployed at an “appropriate time”.
Kirsty Rogers, employment partner at legal business DWF, said: “Many employers will be relying on the government support to see them through the difficult months ahead. The amendment to the rules of the CJRS meaning employers can no longer claim for employees who are serving notice will deter some employers from making redundancies as they simply cannot afford the notice pay, which means many final decisions will be postponed until April.
“News of various vaccinations provided the much-needed light at the end of the tunnel at the end of 2020. It is hoped that as the mass vaccination programme is in full swing, employers will delay making redundancies and continue to use the CJRS until the end of April when restrictions may be reduced as the impact of the vaccine takes full effect and the work may pick up.”