Furlough to last until autumn

Rishi Sunak has announced that the furlough scheme will be extended until the end of September 2021.

Rishi Sunak has announced that the furlough scheme will be extended until the end of September 2021, as part of the latest efforts to support hospitality businesses.

As with the current furlough set-up, employees will receive 80% of their wages, but businesses will then have to contribute 10% in July, and 20% in August and September as the scheme is phased out.

"Extending the full scheme up to and beyond the point of full reopening of the sector is a welcome move," says Kate Nicholls, CEO of UKHospitality. "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 21 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."

Pubs hold breath over Budget

The chancellor's furlough extension follows the news that pubs and bars will also be eligible for further grants to help businesses restart their venues this summer. 

The measure will see 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.

All eyes will be on Sunak at 12.30pm today (3 March), as the entire hospitality industry holds its breath over how much further support is coming its way from government. 

“It is now more important than ever that the chancellor delivers a wider package of support in his Budget statement," adds Nicholls. "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."