"Support, honesty and building the UK's future economy": the Budget's employment implications


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Not the most upbeat of Budget messages, but, in what can only be good news for employers, Rishi Sunak has clearly heeded the increasingly vocal calls for the extension of the furlough scheme.

Yet another extension to furlough

There had been hints that the scheme would be extended until the end of June (by which time it is currently anticipated that the restrictions on the economy will be lifted under the government's roadmap), but adding a further 3 months to the end of September is designed to provide continuing support for those sectors which may encounter a rather slow recovery.

Under the extended scheme employees will continue to be guaranteed 80% of their salary capped at £2,500 until the end of June.  In July employers will be expected to contribute 10% of a furloughed employee's wages, which will rise to 20% in August and September.

What about the self-employed?

Cash grants under the self-employment income support scheme (SEISS) will now be available to those who became self-employed during 2019-20.  People whose turnover has fallen by 30% or more will continue to receive the full 80% grant, while those whose turnover has fallen by less than 30% will receive a 30% grant.

Measures to support the long-term unemployed

The Chancellor has also announced extra measures to support the long-term unemployed through the Kickstart scheme for the under 25s and the Restart scheme for older workers.

Businesses hiring apprentices will receive £3,000 for each apprentice hired between 1 April and 30 September 2021.  In the meantime an additional £126 million will be available for traineeships in England.

And finally, vaccinations…

An extra £1.65 billion will be allocated to help the government reach its target of offering a first dose to every adult by 31 July.  It certainly seems as though the end of the pandemic is finally in sight!

In summary

It remains to be seen how the economic recovery pans out, but in the interim the extension of the furlough scheme will offer employers some comfort.  

In the meantime the extra funding for the vaccination programme suggests that the aim of all adults having a first dose of the vaccine by the end of July will become a reality. This news perhaps makes the issue of mandatory vaccination more pressing for employers (for more information please see our recent bulletin), as more and more of their workforce will have the vaccine offered to them over the coming few months. Whether it signals a mass return to office life in the autumn is something else entirely (for help with implementing agile working, please refer to our product).  

If the past year has taught us one thing, it's the need to respond flexibly, something which, in this case, the Chancellor seems to have done. 

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