Published: 13:13, 12 May 2020
| Updated: 14:20, 12 May 2020
Extension of the government's furlough scheme will come as a "huge help and a huge relief" for firms across the UK, a leading business figure in the county has said.
But another has warned it may only be a "sticking plaster" which is unable to "mend the wound" caused to firms of the lockdown.
However, there will be some changes introduced.
They include allowing staff currently furloughed to return to work part-time as the economy reawakens.
In addition, after July, firms will be asked to contribute towards the payments, to ensure staff are paid no less than 80% of their salary, up to a maximum of £2,500 a month.
Details of that employer contribution, said the Chancellor, will be revealed by the Treasury later this month.
The announcement comes after Boris Johnson revealed a slow relaxation of lockdown rules at the weekend.
Jo James, chief executive of the Kent Invicta Chamber of Commerce, echoing comments made by the British Chambers of Commerce, said: "The extension of the Job Retention Scheme will come as a huge help and a huge relief for businesses across the UK.
"The Chancellor is once again listening to what we’ve been saying, and the changes planned will help businesses bring their people back to work through the introduction of a part-time furlough scheme."
Nationwide, it is thought some 70% of firms are furloughing at least a portion of their staff during the pandemic.
The chamber chief added: "Over the coming months, the government should continue to listen to business and evolve the scheme in line with what’s happening on the ground.
"Further support may yet be needed for companies who are unable to operate for an extended period, or those who face reduced capacity or demand due to ongoing restrictions.”
Amanda Finn, partner and head of employment at Gullands Solicitors, based in Maidstone and Gravesend, said although welcomed by many SMEs, the extended wages support may still not be enough.
She explained: "Without full detail of what happens after July then it is difficult to see what happens in August onwards but the principle that there will be a phased return to work from August to October will assist employers in getting to grips with managing their workforce back into the workplace whilst having regard to their safety.
"Plans need to be considered sooner rather than later about working conditions, office hours and whether they can be staggered and how your staff travel to work or continue at home.
"However, the economics of a recession will mean that unless those business have a market for their goods and services many will be considering now whether the sticking plaster of the extended furlough system is enough to mend the wound.
"Some are already consulting and considering redundancies as a result of the reduced capacity that they will have for clients and customers and bearing in mind the additional costs they must bear to reorganise the workplace to achieve social distancing.”
Alyson Howard, a partner at Canterbury-based accountants MHA MacIntyre Hudson, added: “The furlough scheme has been a great help to business, a real lifeline to save staff positions and keeps those people at home with a head above water, a total now of 7.5 million people.
"But what we now know is that the monthly cost is the same amount as we spend on the NHS – which is a salutary thought – and it has to be paid for some time.
“What the Chancellor is now trying to do is wean us off this support while avoiding a sudden turning off the tap which would cause a great increase in unemployment, adding even more chaos to our already severely impacted economy.
“The devil will be in the detail and we await that as a matter of urgency so we can advise businesses on how best to approach the transition back to work.”
Catherine Daw, partner and head of employment and HR at Maidstone and Canterbury law firm Brachers, said: “The four month extension to the job retentions scheme to the end of October will help reduce the prospect of further job losses in Kent at a time when unemployment is already set to rise, particularly in the tourism and hospitality sectors.
“Many employers were facing the prospect of a significant cashflow squeeze over the summer if the scheme ended as originally planned at the end of June, and the Chancellor has avoided a ‘cliff edge’ end to the furlough scheme.
“Although employers will be expected to support the scheme from August by making contributions towards the costs, the extension and increased flexibility will be welcomed as the economy reopens."