By Scott Wright
A GROWING numbers of British firms were furloughing employees ahead of the Coronavirus Job Retention Scheme going live on Monday, as the cash crisis facing businesses because of the pandemic shows no sign of easing, a key survey has found.
Seventy one cent of businesses have now taken steps to furlough staff, according to the weekly impact tracker from British Chambers of Commerce, up from 66% last week.
But the survey, launched by BCC to monitor the effects of the coronavirus, highlighted the continuing strain on cash flow as huge sections of the economy remain in mothballs. The tracker found 59% of firms have three months of cash in reserve or less.
BCC, which surveyed 678 firms from April 15 to 17, said that, with payday approaching for many firms, the scheme is in a race against time to get cash into the pockets of employees who are facing financial difficulties.
Adam Marshall, director general of BCC, said: “With around 140,000 claims made on the very first day, this is a crunch week for businesses relying on the Job Retention Scheme to pay their staff. Our research suggests that over 70 percent of businesses will be using the furlough scheme in some form, so it is absolutely crucial that it delivers.
“HMRC’s capacity to deal with the demand from business has been encouraging so far – and their staff working under immense pressure to get it up and running deserve our recognition and thanks.
“It is now critical that payments from the furlough scheme reach businesses as smoothly and as quickly as possible in order to protect jobs and livelihoods.
“Ministers will also need to consider keeping the scheme in place for longer, to help businesses transition as the lockdown is eased and the economy moves gradually toward a new normal.”
The Coronavirus Job Retention Scheme allows firms to apply for grants worth up to 80% of employees’ earnings, up to a maximum of £2,500 a month per worker.
Chancellor of the Exchequer Rishi Sunak said on Monday that 140,000 firms had applied to the scheme to furlough around one million staff.
The latest BCC survey, which is the fourth in the series, found 30 per cent have furloughed between 75 and 100 per cent of their workforce; 28 per cent have not furloughed staff.
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