Based on research and with feedback from CIPD members and networks, the report examines how wage-subsidy schemes are devised and, considering health and economic trade-offs and outcomes, presents recommendations for now and the future.
In March 2020 the UK Coronavirus Job Retention Scheme (CJRS), or furlough, was announced. Originally intended to last until the end of May 2020 and save nearly all the jobs it supported. The longevity of the pandemic crisis has led to the furlough scheme being extended multiple times, finally ending on 30 September 2021.Written in January 2021, this report looks at how the furlough scheme has developed, what it has achieved and who has benefitted, before offering the CIPD’s recommendations on the future direction of the scheme. These recommendations also apply to any future wage subsidy schemes which may be introduced.
This report suggests five actions for the future of the furlough scheme to support economic growth while also protecting the population:
- Set a lower limit to ensure more people can access the UK Government subsidy.
- Support ongoing homeworking wherever possible.
- Extend the CJRS until the end of June 2021 and announce it well in advance of the deadline.
- Link the CJRS to support for training for workers who are furloughed or working reduced hours or to provide outplacement skills development support for those made redundant.
- Base future schemes on a flat-rate wage subsidy set at the equivalent of the National Living Wage rate.
Download the report to learn more about our recommendations.
Since the publication of this report in January 2021 - which called for an extension of the CJRS until at least the end of June 2021 – the government announced in the budget on 3 March that furlough would be extended until the end of September 2021. The CIPD welcomes this extension. The scheme has been successful in its aim of saving viable jobs, as evidenced by the only modest rise in unemployment. The cost of the extension will depend on the speed of the vaccination programme and the reopening of the economy. Early signs look promising. We can expect to see much lower numbers of people on the scheme as time goes on. All of our other recommendations and insights in this report still stand.
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