By Ian McConnell

A WARNING over the challenges facing the Scottish economy – with furlough numbers still totalling more than 300,000 at the end of March – has been sounded by the Federation of Small Businesses.

The FSB highlighted the latest official figures for the UK Government’s coronavirus job retention scheme, published last week, which show the number of employments on furlough in Scotland was 327,100 at March 31, down from 368,400 on February 28. In the UK as a whole, there were 4.2 million employments on furlough at the end of March. The furlough scheme is due to end in September.

Speaking ahead of the first meeting of the new Scottish Parliament today, FSB policy chair for Scotland Andrew McRae declared new and returning MSPs “need to focus on the economic and employment challenge ahead”.

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Mr McRae said: “This was an extraordinary election during exceptional times. On behalf of Scotland’s local business community, I offer my congratulations to those that have been successful at the ballot box and thank all the candidates for their commitment to their community.”

He added: “Recovery from the Covid crisis was a key talking point during the campaign, and our new and returning MSPs now need to turn their rhetoric into action. Official figures show that in every corner of the country jobs continue to be supported through the furlough scheme. As this initiative winds down, our parliamentarians and government need to focus on building back the strength of our local and independent firms that are so vital to employment.”

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At March 31, Glasgow had more people furloughed than any other Scottish local authority area, with its 39,500 total, the FSB noted, declaring this was “perhaps unsurprising as the country’s most populous council area”. The FSB observed Glasgow was followed closely by Edinburgh, with 35,400, and then Fife, with 19,700, “broadly matching the population shares of these areas”.

It added: “However [the] Highland and Perth & Kinross council areas had the joint-highest percentage share of workers furloughed (17%), followed by South Ayrshire (16%). Across Scotland, around one in seven eligible workers were using the jobs scheme in the spring.”

Mr McRae noted the figures related to a point “before the most severe restrictions were wound down”. Non-essential retail and much of the hospitality sector have since reopened.

However, Mr McRae warned the figures “show the great challenge Scotland has on [the] horizon”.

He added: “While many businesses are already bringing back workers, it looks unlikely that this will be the story across all sectors and industries. The recovery isn’t assured just because businesses can reopen their doors.”