Furlough scheme set to be extended but subsidy slashed to 60%

Chancellor Rishi Sunak is expected to announce an extension to the furlough scheme under which the UK Government subsidises the wages of workers temporarily laid off due to the coronavirus.

At least 6.3m people are currently having up to 80% of their salaries paid by the taxpayer under the furlough system at a cost of some £8bn.

Sunak has previously said he was preparing to “wean” workers and businesses off the programme – which currently runs until the end of June – but calls have been made for it to be prolonged.

It has been reported the programme will continue to September, although the rate of support will be cut from a maximum of 80% of salary to 60%.

Sunak last week warned the furlough scheme was not “sustainable” at its current rate although he promised there would be no “cliff edge” cut-off.

Last week, a study by the Chartered Institute of Personnel and Development (CIPD) found the furlough scheme may have prevented 374,000 redundancies in Scotland.

It revealed 43% of employers in Scotland have already used the scheme, placing an average of 58% of their staff on furlough.

In the absence of the scheme they would have made 34% of these employees redundant, the survey found.