Around one million furloughed employees face a testing autumn as the scheme closes next week

Around one million employees are on course to be on the furlough scheme when it closes next week (30 September), which will prompt a testing period in the labour market this autumn, the Resolution Foundation said today (Thursday) in response to the ONS Business Insights and Conditions Survey.

The latest ONS data shows that the number of employees on the furlough scheme fell to around 1.4 million in late-August, with 40 per cent of these (around 600,000) fully furloughed. The Foundation calculates that should furlough rates continue to fall at the pace they have over the summer, around one million employees will be on the scheme when it closes on 30 September.

The Foundation says that while the majority of these workers should return to their previous jobs – particularly those on partial furlough as they are already back working – this would still leave hundreds of thousands of more workers needing to find new jobs in October.

This mass search for jobs is set to be testing, says the Foundation, particularly for older employees who are most likely to still be on the furlough scheme and who face a risk of early retirement if they can’t find work.

The Foundation adds that the data shows the Government is right to have extended the furlough scheme for 18 months as it has continued to keep down unemployment throughout the crisis.

Dan Tomlinson, Senior Economist at the Resolution Foundation, said:

“After 18 months in which it has supported over 12 million jobs across the UK, the Government’s Job Retention Scheme is finally set to close next week.

“The furlough scheme has been a living standards lifeline during the pandemic. The fact that 1.4 million employees were still on the scheme just one month before it closes shows that our labour market is still far from full-health.

“The end of furlough is set to prompt a testing period in the labour market as even more people, particularly older workers, look for new jobs. This is another reason not to press ahead with the cut to Universal Credit.”