Furlough scheme could see eight million temporarily out of work and cost £40bn
The government’s job retention scheme (JRS) could see over eight million workers furloughed, think tank Resolution Foundation has claimed.
The foundation estimated that the government could end up funding eight to 10 million employees for weeks or even months.
Its research found that nearly a fifth of smaller firms have plans to furlough all their staff. It added that this could cost up to £40bn over three months.
The JRS will see the Treasury pay 80% of employees’ salaries up to a limit of £2,500 a month.
Torsten Bell, chief executive of the Resolution Foundation, said: “The cost of the scheme depends on firms’ take-up and the length of time workers need to be furloughed for.
“But with recent surveys implying that at least a third of the private sector workforce could be paid through the scheme, it is likely to cost as much as £30bn to £40bn over three months.”
“Although expensive, the social cost of millions going unemployed without the government guarantee would be “far, far greater.”
Some mortgage lenders are working to find solutions for those furloughed during the ongoing COVID-19 crisis.