Anxiety as pay day looms for firms with furloughed staff
Two thirds of businesses have furloughed staff and are awaiting funds from the government to pay them as pay day approaches, a survey shows.
Some 66 per cent of 701 companies said they had furloughed workers ahead of the Job Retention Scheme going live. Almost a third - 31 per cent - said they had furloughed between 75 and 100 per cent of their workforce.
Last week HMRC confirmed the scheme would be open to applications during the week of April 20, leaving little time for funds to start to reach cash-strapped businesses before April’s payroll is processed.
The survey by the British Chambers of Commerce was conducted from 8-10 April.
BCC director general Dr Adam Marshall said: “Businesses on the frontline need cash to start flowing from support schemes fast.
“With April’s payday coming up, we are fast approaching a crunch point, and both the furlough scheme and CBILS facilities need to be accelerated.
“While we’ve seen a high number of firms furloughing staff in anticipation of the Job Retention Scheme coming online, it is still unclear whether they will start receiving funds after their payroll date, which could exacerbate the cash crisis many businesses are facing.
“It is essential that the Job Retention Scheme makes payments to businesses as soon as possible. Any delay could mean more livelihoods under threat, more business failures, and more hardship in our communities.”
The survey also showed just two per cent had ‘successfully accessed’ the government’s Coronavirus Business Interruption loan. Some 15 per cent of respondents said they had successfully accessed grants for small businesses.
Meanwhile six percent of firms said they had no cash in reserve, 17 per cent had less than a month and 36 per cent had enough for between one and three months.
Some 77 per cent of respondents are in the services sector, and 23 per cent of respondents are in the manufacturing sector
Dan Fell, chief executive at Doncaster Chamber, said: “The business community was initially reassured by the sheer scale of the coronavirus support that was announced by government for the economy. In the short-term this helped to preserve a semblance of confidence and encouraged businesses to hang on to staff where they possibly could. However, as days have turned into weeks, businesses have felt let down by shortfalls in flexibility, clarity and pace when it comes to determining what support is available and, crucially, when it comes to getting cash in the bank ahead of pay days in April and May.
“In tandem with this, the scale and long-term nature of the health crisis is becoming ever more apparent and more firms are, sadly, feeling that they might fall through the gaps in the support being offered by Government. These issues are urgent and it is absolutely imperative that the full machinery of government works to get money to the parts of the economy that need it immediately.”