Businesses facing a cash crisis are desperate for the Government to launch its furlough scheme in time for this month’s payrolls, the British Chambers of Commerce has warned.
A survey conducted by the business organisation found that two-thirds of respondents had furloughed staff in advance of the job retention programme, announced last month by Rishi Sunak, the Chancellor, which enables employees to be paid 80pc of their wages up to £2,500 a month while they are not working to help avoid redundancies.
More than half of the firms surveyed had only three months’ cash reserves or less so are reliant on the Government’s support to pay their furloughed workers.
Almost a third of firms said they had already furloughed between 75pc and all of their workforces.
Adam Marshall, director-general of the BCC, said: “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 before their payroll date, which could exacerbate the cash crisis many businesses are facing. Businesses on the front line need cash to start flowing from support schemes fast.”
The BCC also found only 2pc of the 701 respondents had successfully accessed the government’s coronavirus business interruption loans scheme (CBILS).
Of the 9pc who reported being unsuccessful, the main reason was receiving a slow or no response from lenders. Dr Marshall added: “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. Any delay could mean more livelihoods under threat, more business failures, and more hardship in our communities.”
The Chancellor reiterated to the daily Downing Street press conference that the furlough scheme would be open for applications on April 20 and that there would be a period of days between submitting an application and receiving cash.
“That’s comprised of two chunks,” he said. “Our desire and need to do some fraud checks… and… the back system to get the money to people. You should be able to get the cash before the end of the month if everything goes to plan.”