Thursday, March 30, 2023

February Saw 26,600 Jobs Put at Risk

According to figures gleaned from the Insolvency Service via a BBC freedom of information request, about 26,600 jobs were put at risk, a fifth below January’s figure and slightly lower than February 2020.

The number of firms filing redundancy notifications was broadly unchanged in February at 340, although the true total is higher as employers only notify the government about proposed redundancies when they are planning 20 or more job cuts.

The figures imply that government support schemes have succeeded in minimizing damage to employment in the short term. This is most starkly seen when compared with figures from last summer, where there was a sharp spike in job cuts as businesses reeled from the impact of the pandemic.

At least 4.7 million workers were on furlough at the end of February, according to provisional figures from HMRC, about 100,000 more than in January. In January there was a rise of 100,000 on furlough.

Treasury data shows that 858,269 companies and traders drew on the coronavirus job retention scheme for their January payroll, compared with 752,468 in December.

In March, the chancellor announced that furlough would be extended until the end of September. At that point, it is widely anticipated that unemployment and business failures will increase again.

Dr. Nicola Headlam of business monitoring firm Red Flag Alert told the BBC: “A lot of those firms are not going to be able to afford to pay the full wages after 30 September.”

Research by Red Flag announced earlier this month projected that 274,720 jobs were at risk of being lost following the end of the furlough scheme, with 26% of the 741,285 companies making claims under the coronavirus job retention scheme “showing signs of extremely poor financial performance”.

“There is going to be a lot of shakeouts,” said Headlam.

Pub chains JD Wetherspoon and Mitchells & Butlers, two of the biggest employers in the hard-hit pub sector, remained the largest claimants in January, each taking between £25m and £50m of support to pay furloughed staff.

Firms that increased their claims as the January lockdown started included Marks & Spencer, DHL, Jet2, Compass, Stonegate Pubs, TK Maxx, Sports Direct, Arcadia, H&M, New Look, Next, JD Sports, David Lloyd Leisure, Nuffield Health, Ladbrokes and Betfred.

The names of furlough recipients only began to be published in January after ministers changed the law in a bid to crackdown on fraudulent claims. Claims made before December 2020 are not public.