One of the most expensive but effective pillars of support provided by the Government during the pandemic, the furlough scheme, is ending today. It has paid the wages of millions of people for 18 months.
But now this flagship policy is coming to an end, there are fears that it will spark a wave of redundancies.
Furlough: what happens now?
From today, the Job Retention Scheme, or furlough, comes to an end. It has cost more than £70bn and has been one of the major parts of the overall support plan to see the country through the pandemic.
The most up to date estimates show that there are still more than a million people still on the scheme. So as furlough ends, there is going to be a significant portion of the working public that are going to be left in limbo with regards to their employment status.
There are fears that the ending of furlough is going to cause a wave of redundancies. The ending of the scheme also comes at a time where the cost of living is rapidly rising. Gas prices are going up 35% on October 1st after the energy price cap has been lifted in response to huge price rises in the cost of wholesale gas. Food prices continue to rise, as does fuel at the pumps and inflation is spiking high and very quickly. Add to that the Government is cutting Universal Credit at the same time, the squeeze on living costs is actually more of a hammer blow and it has all come at once.
In UK fenestration, the furlough scheme has been well used, although there are very few people left on it as the sector is fully back to work and has been for a while. Anyone still on furlough must now be worried about their position. Given the strength of the bounce-back in our sector, no one really should have been out of work.
And there lies the larger concern. Pretty much all of the economy is back open and has been for a while. Anyone still left on the furlough scheme, which is roughly one million according to estimates, should likely be worried. Why would you not be at work if your sector is open?
Tough months ahead
The ending of the Job Retention Scheme comes against a backdrop of multiple crises and an economy where growth is grinding to a halt. All manner of problems in various supply chains, including fenestration, is causing prices to spike very high, very quickly. It is all leading to higher inflation at a time where living costs go up as we head towards winter.
Whether the ending of furlough leads to a wave of job losses remains to be seen. There is a hope that the million or so people that will be released back into the economy will go on to find employment fairly quickly. Remember that there are just over a million job vacancies in the country at the moment, and many sectors are desperate for new workers to come in and take the strain.
The obvious sectors such HGV drivers and food pickers are areas that need a huge influx of workers and quickly. But we know from our own experience that UK fenestration is also in desperate need of an injection of workers. Fitters, surveyors, fabricators, drivers, pickers, service engineers, communications and more. You name it, we need them.
In the construction sector alone we know that we need more than 200,000 new workers in four years to be able to deliver on the targets promised by the Government. That is a huge ask, but with a million people coming out of furlough and a further 1.67m-ish people already out of work, that makes for a huge potential workforce to aim at.
The fact of the matter though is the next few months for the UK are going to be difficult. There are many things working against us. Where there is a challenge there is always an opportunity, however, and as I wrote about the other day, the UK fenestration sector has a role to play when it comes to the gas crisis.
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