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Firms hand back £1.3bn in furlough cash, official figures show

22 Sep 2021 By Jessica Brown

Experts say the return of funds is a positive sign as businesses prepare for the end of the scheme later this month

Businesses have returned £1.3bn in furlough money since July 2020, official figures have shown, with experts saying the returning of grants is a positive sign for the economy.

Figures released by the Treasury have shown that £300m was handed back in the last three months alone, which includes a mix of employers returning overpayments and firms simply returning money because they no longer need it.

The figures come just weeks before the furlough scheme is set to close at the end of this month.



Already, the number of people on the scheme has dropped to 1.6 million, the lowest level since the start of the pandemic. Around 340,000 people came off the furlough scheme in July, more than a third of whom were aged between 18 and 34.

As the scheme winds down, the government said it is “right that employees can get back to work” as the economy reopens.

The Treasury has also said it was “cracking down” on businesses that have fraudulently claimed furlough money.


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Sean Glancy, partner at UHY Hacker Young, said many firms could be returning cash because they fared better during the pandemic than they first expected.

“When the pandemic struck, we were very nervous as to how it would pan out,” Glancy said. But, businesses adapted quickly and there was a “huge transformation” in the way people worked – including the growth of home working.

“In the end, furlough may not have been as big a need as people were first concerned about,” said Glancy.

Mark Stuart, pro dean for research and innovation at Leeds University Business School, also said the return of furlough cash was a positive sign. But, today’s figures also needed to be seen in the context of the nearly £70bn that has been claimed through the life of the scheme, he said.

Stuart added that while the number of people on the scheme has been decreasing in recent months – a positive sign of its overall success – a large number of employers were still likely to be using furlough right up to when it closes.

“It is an open question what will happen in these cases. There is certainly evidence to suggest that employers that claimed through the [furlough scheme] will be looking to make redundancies post-furlough,” Stuart said.

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