The scheme to “furlough” workers during the Covid-19 crisis may cost up to £40 billion because so many firms have taken up the offer, a report estimated today.
Chancellor Rishi Sunak’s Job Retention Scheme could end up funding eight to 10 million people being laid off for weeks or months, the Resolution Foundation think tank estimated.
It found nearly a fifth of smaller firms plan to furlough all their staff, which means the Treasury will pay four-fifths of their salaries up to a limit of £2,500 a month. Half of companies are putting a majority of staff into the scheme.
A Treasury source denied the foundation’s claim that the scheme could cost triple the amount that the Government first estimated, saying it had always anticipated a big take-up.
The source also said there were no worries about running out of money.
“We can afford this because it is more economically sensible to do this and have firms ready to go that put everyone on Universal Credit,” the source said.
It came as a £2.5 million relief fund was launched to help TV and film workers affected by the lockdown.
The UK’s entertainment industry has been battered by the pandemic, with production halted leaving many out of work.
The Covid-19 Film and TV Emergency Relief Fund will offer assistance to those hit hardest by the outbreak.
It was created by The Film And TV Charity in partnership with the British Film Institute and is supported by £2.5 million in donations from Netflix, the BFI, BBC Studios, BBC Content, WarnerMedia and others.
Workers have two weeks to apply for the fund, organisers said, with one-off grants of between £500 and £2,500 awarded based on need.
Listen to The Leader: Coronavirus Daily podcast
Alex Pumfrey, CEO of The Film and TV Charity, said: “Unprecedented times call for an exceptional response.”
