Cumbria Chamber of Commerce is concerned for businesses in the region who have been put into an increasingly tougher financial position after the latest government changes to the furlough scheme came into effect on Monday.
A North-West regional break-down of the British Chambers’ of Commerce latest Net Zero and Covid-19 Reopening Survey 2021 shows that 73 per cent of businesses in total will have to either make staff redundant, reduce staffing hours, scrap any recruitment/investment plans or seek further external support to survive.
From Sunday (1 August 2021), businesses now have to pay a minimum of 20 per cent of their furloughed workers’ salaries while the government covers 60 per cent. As before while on furlough employees’ only get 80 per cent of their usual salary unless their employer wishes to top it up.
The data also highlights:
– Only 55 per cent of businesses are currently running at full capacity.
– A total of 27 per cent of businesses predict they still won’t be running at full capacity into early 2022.
– Around a quarter of all businesses have been unable to prepare for changes to Covid-19 restrictions based on the government’s guidance.
– A mere 36 per cent of all businesses have found the covid-19 grant schemes effective.
The research has been released at a similar time to the latest update from the Cumbria Observatory, which shows that while the BCC’s study is a concern for the region, the number of employees on furlough has continued to drop to 11,300 at the start of the month, down by 38 per cent from May.
Suzanne Caldwell, Managing Director of Cumbria Chamber of Commerce, said: “For the majority of those businesses in need, the financial assistance has been insufficient.
“While we appreciate there was an impetus to move quickly at the beginning, there has been ample time since the start of the crisis to agree and implement more suitable, tailored packages and levels of support, that focus on those with real need at an appropriate level.
“There is a general mood being portrayed that most, or all, of the economy are back to business as usual and it is important for us to highlight that this is just not the case. That said this is not entirely down to Covid per se, with staff shortages, whether due to Covid and the pingdemic or not, having a significant impact on levels of trading.
“We’re aware from HR professionals that businesses are still utilising the furlough scheme, especially for staff when they are having to self-isolate.
“But at the same time, we’re receiving reports from businesses of staff refusing to return from furlough and staff having taken up other jobs while also receiving furlough payments.
“The government needs to look again at furlough and other support and make sure the support is there where there is genuine need, while at the same time getting people off furlough and back into the jobs which have been held open for them.
“If those jobs no longer exist, there are hundreds of employers desperate for staff.”
The latest Net Zero and Covid-19 Reopening Survey 2021 took place between 5 and 23 July and is the most recent national economic indicator involving thousands of businesses across the UK.
On a national level, the sector most reliant on the furlough scheme is now the culture, arts and night-time economy, overtaking hospitality and tourism. But in Cumbria hospitality and tourism businesses are still those most active in utilising the furlough scheme – despite the sector being desperate for staff – followed by retail and other customer service focused businesses.
While some Cumbrian areas such as South Lakeland and Eden have seen the sharpest fall in those using the furlough scheme, down by 44 and 43 per cent respectively, those areas were also the most reliant earlier in the year.