Furlough Scheme extension appears unlikely as the new Kickstart Scheme comes into effect
As of 1 September 2020, the Government's Kickstart Scheme has come into play. Under the Kickstart Scheme, employers will receive grants of £1,500 to provide six-month placements for people aged under 24 and it is hoped that this will protect the younger generation who may be worst affected in the rising unemployment.
There have been warnings that the UK's unemployment rate is likely to reach the peaks of 1980s rates but the Government has refused to entertain the extension of the furlough scheme which has already cost the UK tax payer almost £40bn to date. We have also seen that Germany has recently decided to extend its furlough scheme, known as Kuzerbeit, until the end of 2021 instead of expiring in March 2021 as initially planned and even executives in Northern Ireland have recently submitted a proposal which includes the extension of their furlough scheme.
All of this has re-opened the question of whether the UK will follow suit. Research by the National Institute for Economic and Social Research published in the Guardian has concluded that extending the furlough scheme until June 2021 will cost the Government an additional £10bn and so the question is whether this is a 'small' price to pay compared with the potential of it saving millions of jobs and minimising the impact that unemployment inevitably has on the national workforce?
Over 9 million people have been placed on the furlough scheme since it was announced in April 2020 and there is no doubt that it has been a lifeline to many employers and employees. But we are not sure that there is a right or wrong answer as to whether the scheme should be extended or not.
We continue to keep an eye out on this and support our clients with the information available to ensure that they have the most up to date information available. If you do have any question from the options and impact of the furlough or Kickstart schemes to the potential of having to undertake a redundancy exercise, our expert team are on hand to offer support and advice as we have no doubt that it leaves a devastating effect on employees but also impacts businesses and those left behind.
We do not have the answers, but we are certainly ready and available to support both employers and employees with the post-furlough transition as may be required.
Please do get in touch with us for a no-obligation initial conversation. Contact us on 01245 228141 or via e-mail
This is not legal advice; it is intended to provide information of general interest about current legal issues.