By Ian McConnell

ONE-quarter of UK businesses with furloughed staff have said they cannot afford to contribute any amount to the cost of the UK Government’s coronavirus job retention scheme between August and October.

This difficulty for firms, revealed in a survey of nearly 700 directors conducted between May 20 and 27, raises the spectre of heavy job losses. The survey, by the Institute of Directors, shows around half of businesses using the job retention scheme for their staff could provide 20 per cent or more of furloughed workers’ full-time salaries between August and October.

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Under the scheme, the UK Government currently pays 80% of the wages and salaries of furloughed workers up to £2,500 a month. Although he announced an extension of the scheme to October earlier this month, Chancellor Rishi Sunak highlighted plans to ask employers to contribute to the cost from August.

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More than one-third of those using the job retention scheme said they would bring the majority of their furloughed workers back part-time, if this were allowed by the programme. Less than one in ten said they would not bring anyone back part-time.

The IoD said that, “to protect jobs”, there must be “as much flexibility as possible in the system”. It noted the majority of those polled with staff on furlough said they “would make use of shorter minimum furlough periods if allowed”. It added: “Currently, workers must be on furlough for at least three weeks, making it difficult for firms to react to uncertain demand.”

Malcolm Cannon, national director of IoD Scotland, said: “The furlough scheme has been a lifeline for hundreds of businesses and workers across Scotland, but our members have made it clear that when the support ends in August jobs will be lost. Just as when the extension to furlough was announced...clarity will be needed for devolved governments to ensure not lose out on support, given the disparities between lockdown end dates.”