The number of collective redundancies planned by employers continues to fall, despite the imminent closure of the government’s furlough funding.
The Coronavirus Job Retention Scheme (CJRS) closes on 30 September and currently allows businesses to claim 60% of a furloughed employee’s pay, down from 80% before the summer.
But there are currently no signs of the associated spike in redundancies that many predicted, after the Insolvency Service published data on the number of advanced notifications of redundancy submitted by employers in England, Scotland and Wales.
Only 143 employers submitted HR1 forms – the statutory documentation required when any employer plans 20 or more lay-offs – in August, up slightly on July, but less than half the monthly number recorded before the coronavirus pandemic.
Those employers planned a total of 12,687 redundancies, an 11% fall on July and a fraction of the 155,576 planned job cuts in July 2020.
Furlough and redundancy
Many had forecast that the winding down of the furlough scheme would lead many employers to let go of workers. A British Chambers of Commerce survey last month found that 18% of firms were likely to make staff redundant because of changes to the furlough rules.
Latest CJRS data from HM Revenue and Customs showed that there were 540,000 employers with 1.9 million staff on furlough on 30 June 2021, a decrease from 31 May when there were 2.4 million employments on furlough. Since the start of the scheme a total of 11.6 million jobs have been placed on furlough, at least in part.
Tony Wilson, director of the Institute for Employment Studies, told the BBC that an autumn surge in redundancies now seemed less likely. “Given the exceptionally high labour demand and fewer people in the labour market due to the crisis and Brexit, unemployment is going to keep falling back over the next few months even as the furlough scheme winds up,” he said.
“The end of furlough may well slow or reverse that decline, but the biggest issues in the labour market now are that there’s not enough workers rather than not enough jobs.”