Furlough Is Supporting 600,000 Hospitality Jobs, But That Doesn’t Mean It Will Save Them

Had the coronavirus furlough scheme ended as planned on 31 October, 600,000 hospitality jobs would have been left in limbo, according to the Caterer. Of the 15 sectors covered in a report by Her Majesty’s Revenue and Customs (HMRC), accommodation and food services had the highest proportion of workforce supported by the scheme, at 27 percent.

Rishi Sunak announced a new extension to the scheme this week, which will see the government pay 80 percent of wages up to the end of April 2021. Originally, the chancellor had intended to replace it with a new job support scheme that relied on people’s employment being “viable.” This was quickly scrapped after it became clear — as it had already been to restaurant employers — that many jobs in the sector would be unviable for much longer than this year.

That wasn’t the main problem with the new scheme. The main problem was the way it dovetailed with coronavirus measures at the time — with pubs only permitted to open if serving “substantial meals,” and restaurants labouring under a 10 p.m. curfew alongside longer-running social distancing limitations on capacity. Those measures made businesses less viable, because they reduced their capacity to take in revenue; that in turn made restaurants jobs less viable, because the shifts weren’t there to be worked. Extending furlough was the right decision.

Extending furlough was also, however, not sufficient. Sunak didn’t make the announcement until early November, after the original scheme had expired and well after businesses needing to make decisions to keep them going had either kept employees on, or let them go.

Ultimately, supporting jobs doesn’t mean saving them. With tier three shutting restaurants and pubs down once more, further restriction expected through the rest of winter, and the impact of a vaccine unlikely until Easter 2021, time is going to run out for some businesses before furlough does, without further financial intervention or concessions from landlords on rent. If time does run out, then employees recorded as being on furlough, and supported by the government will lose their jobs. The scheme can support them, but it can’t save them.