Up to 1.7 million people remained on furlough last month, official data showed on Thursday, just weeks ahead of the scheme coming to an end.
According to the Office for National Statistics, the proportion of businesses’ workforce reported to be on full or partial furlough stood at 6%, or between 1.3m and 1.7m people, in late August, broadly unchanged from the 1.6m who were on furlough as at the end of July.
Within that, 2% of the workforce – around 300,000 to 800,000 people – is estimated to be fully furloughed. The largest number of furloughed workers are in the other services sector, which includes hairdressing and beauty treatments, with 16% currently using the scheme. In arts, entertainment and recreation, 10% of the workforce is furloughed.
The Coronavirus Job Retention Scheme was introduced in March 2020 by chancellor Rishi Sunak to support staff at companies that could not operate because of pandemic restrictions. The scheme, which is expected to cost around £70bn, is slated to end, following a number of extensions, on 30 September.
There are concerns that unemployment numbers will spike following the end of the scheme.
According to the ONS, which published its monthly update on the impact of Covid on the UK economy, 2% of firms answered “yes” when asked if they expected to make any of their workforce redundant over the next three months, while 19% said they were not sure.
The biggest number of redundancies is expected to be seen in three sectors: other services, human health and social work, and administrative and support service activities.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “The furlough figures refused to budge in August, which means up to 1.7m people could still be vulnerable when the scheme vanishes next week.
“It’s a real concern that these figures haven’t shifted. There’s always the hope that employers are just waiting for the end of the scheme to bring people back, but it means hundreds of thousands of people are still stuck at home, worrying about the future. And while only 2% of businesses plan to lay people off, another 19% have no idea whether they’ll need to let people go or not.”
