Scrap the furlough, create special redundancy packages and give people more time to find work

Columnists | Economy & Politics
Charlie Mullins

Once the dust settles after the celebrations of the reopening of pubs and restaurants along with other parts of the economy, it will be time for employers to take serious decisions about the future. And the sooner the better.

Front and centre are what our current workforces have to look like to get through this crisis and make sure we have a solid platform to build on when we come out the other side.

That means facing the stark realities of life that businesses will have smaller workforces for some time to come, which means redundancies are unavoidable.

The furlough scheme has created two massive hurdles to overcome – firstly, businesses that don’t want to make the tough call on job cuts yet because they have a supply of government cash to pass to their stay at home workers.

The other is, of course, workers who have been wrapped up in a protective blanket that they don’t want to leave.

That said, quite a few of them looked pretty happy to shed a lot more than that by stripping down to their swimming trunks on Bournemouth beach the other week while the rest of us slaved away!!

It was right to introduce the scheme at the time, especially for companies that were forced to shut down by the government, or those that saw a massive drop off in work due to the lockdown

By paying 80% of peoples wages the government has been rightly protecting people whose jobs will return once firms allowed to open and they are able to return to normal.

The scheme is generous and innovative, but it is disguising hidden unemployment and, for some people, giving people a false sense of security.

It has created a ghost workforce that is of no benefit to the economy or businesses.

Far better to transparent and honest about the situation and direct policy towards wider economic recovery and restructuring.

Employers who are delaying action to make furloughed employees redundant are not entering into the spirit of the original purpose of the Coronavirus Job Retention Scheme.

Many employers are able to calculate the numbers of jobs that will need to go, even if the economy recovers to their most positive projections. I know of several business in different sectors who are keeping people on their books who they know will be let go once the job retention scheme ends in October.

I think it would be fairer to the employees if they knew where they stood. It would be fairer to the taxpayer who is footing the wage bill and it will be better for the businesses that they can plan and budget more effectively by making people redundant now.

It would also help those businesses that want to recruit who are currently playing a strategy game with chess pieces they can’t move because potential candidates are furloughed up until the scheme ends.

This could be achieved if the government converted some of the remaining funds for next few months into support grants to enable these employers to fund special redundancy pay-outs. This could put emergency cash into people’s pockets, but also give them longer to find another job, without facing the run up to Christmas in a very difficult competitive jobs market.

I certainly won’t be paying for anyone to sit at home or using any government cash for them to get a wage. I’d rather give them redundancy now, so they have a bit of money, but more time to find work elsewhere.

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