Furlough was a 'godsend', Suffolk firms say as scheme nears end

This month employers will have to start picking up some of the tab for furloughed staff

This month employers will have to start picking up some of the tab for furloughed staff for the first time in more than a year - Credit: PA

The furlough scheme which paid people's wages during the coronavirus pandemic has been labelled a "godsend" by Suffolk firms - as the initiative begins to be wound down.

The Coronavirus Job Retention Scheme saw the government pay 80% of people's wages when they either could not work or their employers could not afford to pay them.

It was designed to stop companies laying off workers during the crisis, which would have left many struggling to pay the bills.

However, the scheme is due to finish in September, with the government's contribution reducing gradually before then.

From today, employers must contribute 10% of their staff's pay.


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Steve Magnall, co-owner of Two Magpies bakery - which has branches in Southwold, Aldeburgh and Darsham - said: "It's been a godsend, that's undeniable.

"I've opened two new sites this year to make the most of the opportunity with pent-up demand, and I don't think I would have done that if it hadn't been for furlough.

Husband and wife team Rebecca Bishop and Steve Magnall of Two Magpies Picture: SARAH LUCY BROWN

Husband and wife team Rebecca Bishop and Steve Magnall of Two Magpies Picture: SARAH LUCY BROWN - Credit: Archant

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"Our business would have survived. We saw the pandemic coming and had already scaled back staff.

"It's also worth remembering that this isn't free money — we'll have to pay it back some time.

"Furlough doesn't need to be extended across the board but for pubs and late night industries it potentially should be.

"The real shock will be a return of business rates and VAT rises.

"The high street was being decimated by online retailers before the pandemic and this was an advantage.

"It would be a real win if those policies could be looked at."

Ar present, 450,000 UK businesses are still using furlough - and fears have been raised about the impact of its withdrawal.

Chris Starkie, chief executive of New Anglia Local Enterprise Partnership, said: “The furlough scheme has, without a doubt, supported thousands of businesses and workers across our region through the past 15 months and it will continue to support many over the summer.

Chris Starkie, chief executive of the New Anglia Local Enterprise Partnership.

Chris Starkie, chief executive of the New Anglia Local Enterprise Partnership. - Credit: Archant

“At its height in May 2020, about 22% of employees in Norfolk and Suffolk were furloughed.

"Since then, many businesses have been able to reopen.

"However, there are still challenges in the hospitality, leisure and tourism sectors where firms may have reopened but are not able to trade at capacity, so may not yet require all of their staff.

“When the government announced in the March budget that the scheme would be extended until the end of September – albeit with increasing payments required from employers – we welcomed that decision as it allows businesses to find their feet again as the economy starts to recover."

Elena Magrini, senior analyst at think tank Centre for Cities, said: "The furlough scheme was not just good for businesses — it kept a lot of people who would otherwise be in serious debt out of it.

"Instead, people have saved and in time will release that cash into the economy, thus creating more demand and jobs.

"The government is right to scale back support if their plans to fully reopen the economy go ahead.

"However, if businesses are still operating under restrictions, they cannot be expected to do so without any help.

"It would create unemployment for those currently on furlough, through no fault of businesses which otherwise would have cash running through them."

Mr Starkie added that any business owners concerned about the continuing impact of Covid-19 could contact the LEP for free advice.

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