A firm of chartered accountants and business advisors has hailed the impact of the Government’s Job Retention Scheme in helping protect businesses - but has warned the worst is yet to come.
The Coronavirus Job Retention Scheme (CJRS) allowed companies to furlough staff and cut costs during the pandemic.
As soon as the scheme was announced in April, Yorkshire-based Shenward immediately stepped in to work closely with its clients and help safeguard their businesses.
So far, the company has claimed £1.5 million on behalf of its clients and expects that figure to double by the time the scheme is wound up in October.
Last month Chancellor Rishi Sunak announced a £1,000 per employee bonus for companies who bring back furloughed staff and keep them employed for three months after the scheme ends.
Shenward expects the final benefit to its clients to be well over £3 million.
The firm’s managing partner Sherad Dewedi said: “The Coronavirus Job Retention Scheme has been a vital tool in the Government’s armoury when it came to protecting the economy.
“Lockdown meant that many successful and profitable businesses had to shut their doors and without this scheme many small businesses, the lifeblood of the economy, would have closed and loyal and skilled employees would have lost their jobs.
“Working closely with our clients we have been able to ensure that businesses have survived the impact of the pandemic and are primed and ready to take advantage as the economy re-opens.”
According to HMRC by July 26 £31.7 billion had been claimed under the Coronavirus Job Retention Scheme with 9.5 million workers furloughed. Some 1.2 million businesses have utilised the scheme since April.
The Government will continue to pay 80% of employees’ wages until October but employers will start paying pension contributions and National Insurance, around 5% of employment costs, from August.
Around one in three of the private sector workforces has been furloughed and the Chancellor has always said not all jobs can be saved.
Mr Dewedi said that while the CJRS had been successful so far, the British economy would be set for a further blow as the scheme is wound down.
“While we’ve seen the likes of airlines and large retailers announce the loss of thousands of jobs the worst impact of Coronavirus has yet to be felt,” he said.
“Many perfectly good businesses will have to close or make staff redundant through no fault of their own.
“This will be a recession unlike any other and, as we’ve seen with localised lockdowns and restrictions, no one knows what the immediate future holds. Sadly, what is certain is that the economy will get worse before it gets better.
“There will be much pain ahead but hopefully the CJRS has bought businesses and their employees some time to prepare. We all have to be ready for what might happen next.”