Two-thirds of businesses have furloughed employees, ONS figures show

Experts say high uptake of the government’s job retention scheme shows it is ‘staving off large-scale job cuts’

Two-thirds of employers have furloughed workers using the government’s job retention scheme, the latest official figures have shown.

An update from the Office for National Statistics (ONS) found out of more than 5,000 businesses surveyed, 66 per cent had used the government’s job retention scheme to avoid making redundancies – making the scheme the most popular of all the financial aid programmes created by the government to help businesses through the coronavirus outbreak, which also included business rates holidays and VAT payment deferrals.

Among companies that reported having temporarily closed or paused trading, the number that have made use of the furlough scheme rose to 82 per cent.

Gerwyn Davies, labour market adviser at the CIPD, said the figures were encouraging and the high uptake implied the scheme “has succeeded in staving off the large-scale job cuts that one would normally associate with the scale of this economic fallout”.

Looking forward, Davies said it was important for the scheme to be “gradually wound down” when the time came, suggesting a short-time working scheme, which allowed firms to offer reduced working hours to employees while still receiving wage subsidies, would fit with the gradual reopening of the economy.

Today’s statistics – part of the ONS’s weekly experimental data on the impacts of the coronavirus crisis – also found that one in four companies (24 per cent) had seen their turnover drop by more than 50 per cent since the lockdown. A further 34 per cent said their turnover had declined by up to 50 per cent, while 30 per cent reported their sales were unaffected by the crisis.

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Nearly a third (30 per cent) of working adults said they had not travelled to work or had worked from home between 9 April and 20 April. Detail was not available on whether this was due to them being on furlough, self-isolating or off sick, or for another reason.

However, Davies said this was not a cause for alarm. “It’s an achievement that 70 per cent are working, given the scale of the restrictions,” he said, crediting the effort employers had made to extend flexible working arrangements and to ensure employees had the facilities to work from home.

Davies added the large-scale expansion of homeworking capacity across UK businesses was likely to have a lasting effect on how companies operate once restrictions are lifted. “One wonders what the impact of the economic fallout might have been were it not for flexible working, but above all, the extension and rollout of home working across the UK looks set to have long-term implications as well,” he said.

The ONS data was collected from 5,158 UK businesses, and covers the period from 6 April to 19 April, the third and fourth weeks of government-mandated lockdown.

In separate research, the Institute for Fiscal Studies (IFS) reported that workers from non-white ethnic backgrounds were more economically vulnerable to the impacts of the coronavirus crisis.

Its report noted that white British men were less likely than those of other ethnic backgrounds to work in sectors of the economy that had been shut down as a result of the crisis, such as restaurants and bars, and therefore could face higher job insecurity during lockdown.

Professor Lucinda Platt, professor of social policy and sociology at the London School of Economics and member of the IFS Deaton Review of Inequalities panel, noted “striking differences in economic vulnerability between ethnic groups”.

Bangladeshi men were four times, and Pakistani men three times, more likely than their white counterparts to have jobs in industries that had been shut down, while black African and black Caribbean men were 50 per cent more likely than white men to work in shut-down sectors.