Furlough scheme ends today after supporting millions of workers during the pandemic and the UK Government announces £500m in new grants to help poorest households
The government's furlough scheme closes on Thursday, with uncertainty ahead for people who have not yet fully returned to work.
Nearly one million workers were expected to be on the scheme at the end of September, according to research by the Resolution Foundation.
Of those on furlough in late July, about half on the scheme were able to work some of the time, the HMRC says.
Since the start of the pandemic, it has helped pay the wages of 11.6 million workers.
But many forecasters, including the Bank of England, are expecting a small rise in unemployment as it ends.
The chancellor said he was "immensely proud" of the near £70bn scheme, but now was the right time to close it, despite calls for further support from some badly-hit companies.
The travel sector has suffered more than most during the pandemic, with businesses being affected by changing restrictions and lower consumer confidence.
Furlough was introduced in March 2020 after Covid-19 forced large parts of the UK economy to close. Officially known as the Coronavirus Job Retention Scheme, it saw the government pay towards the wages of people who could not work, or whose employers could no longer afford to pay them, up to a monthly limit of £2,500.
At first it paid 80% of their usual wage, but in August and September it paid 60%, with employers paying 20%.
There have been big recruitment drives for hospitality staff, HGV drivers and warehouse workers as businesses get back on their feet.
Latest official figures show the UK's economy grew by 5.5% between April and June - revised up from the initial estimate of 4.8%.
The uplift was largely driven by household spending rebounding after lockdowns, although many firms are now being held back by current labour shortages.
"Any hope that the end of the furlough scheme might be the magic wand to solve the supply chain crisis is likely to be wishful thinking," said Susannah Streeter, from Hargreaves Lansdown.
There is likely to be a big mismatch of skills and experience between those leaving the furlough scheme and the jobs on offer, she added.
The £20 weekly top-up support provided during Covid to universal credit will also be removed.
The government has announced £500m of grants to help families struggling with the cost of living.
The move comes as rising prices, including spiralling energy bills, are making it harder for those on low incomes to make ends meet.
The new fund will help households pay for essentials like food and bills.
Local councils in England will distribute small grants to support millions of households, the government said.
The cash will be made available in October. Scotland, Wales and Northern Ireland will receive up to £79m of the £500m.
Work and Pensions Secretary Therese Coffey said that the government had helped millions of people over the pandemic.
"Many are now back on their feet, but we know that some may still need further support. Our targeted Household Support Fund is here to help those vulnerable households with essential costs as we push through the last stages of our recovery from the pandemic."
The fund replaces the Covid-19 local support grant programme, which was designed to support those most in need across England with the cost of food, energy (heating, cooking, lighting), water bills (including sewerage) and other daily needs.
The new fund will run over winter and those in need of support should contact their local council, the government said.
Households struggling with the cost of food, heating, water and other essentials will be eligible for support.
Chancellor Rishi Sunak said: "Everyone should be able to afford the essentials, and we are committed to ensuring that is the case."
He added that the new fund would provide a "lifeline" for those at risk of struggling to keep up with their bills this winter.
The government said the fund will bolster support from the Warm Home Discount which gives a £140 rebate on energy bills each winter to more than 2.2 million low-income households and the Cold Weather Payment which provides £25 extra a week for poorer households when the temperature is consistently below zero.
Posted on Sep 30, 2021.