The government’s job retention scheme will be extended until the end of October, chancellor Rishi Sunak has announced
Hundreds of practices – including the top ten AJ100 firms – have relied upon the furlough scheme, in which the government pays 80 per cent of the salary of staff who have been stood down, up to a maximum of £2,500 per month.
The scheme was introduced in March and had been guaranteed until the end of June. But it will now be in place until at least the end of October, although the government will be asking companies to ’start sharing’ the cost of the programme from August.
From that point practices will be able to bring back furloughed employees on a part-time basis.
Sunak told the House of Commons: ‘As we open the economy we will need to support people back to work: we will do so in a measured way.’
He added: ‘Workers will, through the combined efforts of government and employers, continue to receive the same level of overall support as they do now at 80 per cent of their current salary.’
However, this number could reduce as employees who cannot work from home – such as those working in model shops – are now permitted to go into the office.
The chancellor’s announcement was more generous than many anticipated, with newspaper reports having suggested the furlough scheme would be tweaked so only 60 per cent of furloughed employees’ wages were paid.
Jack Pringle, principal at Perkins + Will and a former RIBA president, said the ‘welcome extension of the furlough scheme will give firms a better chance to assess their situation as we come out of lockdown and, hopefully, schemes start up again’.
And Tamsyn Curley, director at architeectural recruiter Place_, said the extension allows ‘more time and breathing space for our industry bounce back’, adding that it ‘hopefully means that companies will not be forced to make immediate or drastic decisions due to the impact of Covid-19.’
But a director at one AJ100 practice, who asked not to be named, said: ‘The scheme is masking redundancies which will have to be put in place once this prop is removed. Its difficult to assess the magnitude of this right now, but it’s bound to be significant.’
Paul Chappell, director at recruiter 9B Careers, said the extension to the furlough scheme ‘is very much reliant on the government’s hopeful V-shaped recovery over the next 12 months, which some are sceptical about.’
He added: ‘Without a strong rebound, the redundancies will have just been delayed but at least it gives the opportunity for architects to remain employed until the situation becomes clearer.’