A third of furloughed hospitality staff 'at risk of redundancy', warns PricewaterhouseCoopers

By James McAllister

- Last updated on GMT

A third of furloughed hospitality staff 'at risk of redundancy', warns PricewaterhouseCoopers

Related tags: Pricewaterhousecoopers, Redundancy, Coronavirus, Job Retention Scheme

A new report from PricewaterhouseCoopers (PwC) has warned that a third of furloughed workers in UK hotels, restaurants and cafes could lose their jobs by the end of the year.

According to the report workers in 'accommodation and food services', where furlough numbers are high and both demand and capacity have been hit hard by the effects of the pandemic, are the most at risk.

Some 32% of furloughed staff in these sectors risk redundancy, PwC suggests.

“Part of the success of the furlough scheme and other fiscal and liquidity support was that it relieved working capital pressures faced by businesses, reducing the need to lay-off workers to free up cash flow or prevent permanent business closures,” says Jing Teow, senior economist at PwC.

“However, the projected decline in demand for workers as a result of weaker economic activity means that in the absence of further support, not all furloughed workers will have jobs to return to when the furlough scheme ends.”

The Government is currently preparing to wind down the furlough scheme (also known as the Coronavirus Job Retention Scheme or JRS), with Chancellor Rishi Sunak announcing back in May​ that it will close permanently at the end of October.

The scheme was set up soon after the Coronavirus lockdown was mandated, and until now has allowed employers to claim for a cash grant of up to 80% of a furloughed employee's wages capped at £2,500 a month.

From next month, however, the JRS will continue to allow employers to claim 80% of wages, but they will be asked to pay National Insurance and employee pension contributions.

In September, employers will also be required to pay 10% of an employee's wages; rising to 20% in October.

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