Furlough: What support is available now the scheme has come to an end?

How will the end of the Coronavirus Job Retention Scheme affect the economy? Credit: PA

The furlough scheme, which has kept millions of Britons in jobs throughout the Covid-19 pandemic, comes to an end on Thursday.

Over the past 18 months, the Coronavirus Job Retention Scheme has covered the wages of 11.6 million people, at a cost to the government of almost £70 billion.

But the removal of the scheme on September 30 will leave almost one million workers still receiving support in limbo, the Office for National Statistics (ONS) estimates.

Ministers have admitted there will be job losses, while economists say that though some will find work in recovering sectors like hospitality and travel, they warn a spike in unemployment is highly likely.

What happens to employees still using the furlough scheme?

Almost one million workers are still signed up to the scheme, with concerns raised over industries and employers who still need it to pay staff wages.

The government has been criticised for not doing enough to continue supporting hard-hit sectors that still depend on it, such as international travel, with warnings that jobs will be lost.

On Thursday ministers announced that the poorest families will still be entitled to "small grants" to help them get through the winter as part of the new Household Support Fund.

Former Shadow Chancellor John McDonnell slammed ministers for having "no plan" in place for such industries.

But Chancellor Rishi Sunak insisted there are plans in place which are "focused on giving people the skills and the opportunities they need to find fantastic work," he said on Thursday.

"We're not done supporting people, our plan for jobs is literally throwing the kitchen sink at helping people get the skills they need and new opportunities."

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Pushed on whether hospitality in particular needed more support now furlough has ended, Mr Sunak said: "We know it's been really tough for them and that's why we've put a lot of support in place."

He insisted that support hasn't finished, despite the end of furlough.

"Businesses like pubs, restaurants and cafes are still seeing a really significant discount on their business rates bills for the remainder of this financial year and they're also seeing discounts on VAT until spring next year," Mr Sunak stressed.

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What happens next - will support still be available?

The government announced it will launch the Household Support Fund in October to help vulnerable households over winter, as furlough and the £20 Universal Credit (UC) uplift are removed.

Small grants worth up to £500 million will help struggling families meet costs for daily needs such as food, clothing and utilities.

Local councils in England will start distributing the small grants from October to help millions of households, the government said.

Wales, Scotland and Northern Ireland will receive up to £79 million of the £500 million fund.

Work and Pensions Secretary Therese Coffey said in a statement that the government has “helped millions of people provide for their families” over the last year.

“Many are now back on their feet but we know that some may still need further support,” Ms Coffey added.

“Our targeted Household Support Fund is here to help those vulnerable households with essential costs as we push through the last stages of our recovery from the pandemic.”

Mr Sunak added that the new scheme will "provide support to people to help them get through the winter.

"We appreciate that prices of some things have gone up rapidly and the half a billion pounds will help three or four million of our most vulnerable families with £100 or £150 over the winter period and I know that will make a difference for people at I know what is a difficult time."

Many in the hospitality industry relied on furlough through the lockdown. Credit: PA

What was the furlough scheme?

The Coronavirus Job retention Scheme (CJRS) - more commonly known as furlough - was introduced in March 2020 as the country was in the throes of its first lockdown.

The government helped cover the wages of those who could no longer work due to the nationwide "stay at home" regulations and employers who could not pay their staff.

When it first launched in March 2020, the scheme covered 80% of staff wages up to a monthly limit of £2,500.

In July, the government's contribution dropped to 70% covering up to £2,187.50, with employers told to start paying 10% of salaries.

It dropped to 60% in August and September for salaries up to £1,875 per month, with bosses contributing 20% of wages.

The furlough scheme helped support workers in industries forced to shut, like theatre. Credit: PA

How many people were furloughed?

As the economy reopened this spring with more security amid the government's "roadmap" out of lockdown, more people were taken off furlough.

The number of people relying on the scheme peaked in May 2020 at 8.9 million - it fell by autumn but jumped up to 5.1 million in late January, this year.

The most recent figures show that by the end of July, 1.6 million people were still on furlough - the lowest level since the start of the UK's outbreak and 340,000 less than the month before.

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