Print bosses mull furlough taper

Jo Francis
Thursday, July 1, 2021

It’s the beginning of a new crunch time for some print bosses as the government’s furlough scheme begins to taper off, with businesses required to shoulder more of the costs as a result.

Scheme has now has supported some 11.6m jobs, at a cost of at least £66bn
Scheme has now has supported some 11.6m jobs, at a cost of at least £66bn

The Coronavirus Job Retention Scheme began in April 2020, and since then has supported some 11.6m jobs across the UK, at a cost of at least £66bn to taxpayers. 

It was extended to 30 September 2021 in Chancellor Rishi Sunak’s budget in March. 

While some firms have paid back their furlough support, including De La Rue, DS Smith and Macfarlane, thousands of workers across the printing industry are currently still on furlough or flexible furlough, with some larger print companies and groups claiming in the highest band of £250,001-£500,000 a month based on the detailed government figures for March. 

According to industry sources, some firms are even choosing to ‘flex’ the scheme to the extent that workers are being sent home and put back on furlough part-way through a shift. 

The latest HMRC statistics released today (1 July), show that the overall number of workers on furlough reduced by more than 1m during May, but there are still 2.4m people relying on the scheme. 

Specific data for firms involved with printing and related services shows a 60% uptake among eligible employers, with 21,800 jobs furloughed in the period – almost 30% of those eligible (see table below).

Sector  Employers with PAYE staff eligible for furlough Employments eligible for furlough Number of employers furloughing
at 31 May*
Take-up rate
at 31 May*
Employments on furlough
at 31 May*
 Take-up rate
at
31 May*
Printing and service activities related to printing 7,000 75,000 4,200 60% 21,800 29%
Manufacture of articles of paper & paperboard  900 47,700 300 36% 1,800 4%
Manufacture of pulp; paper & paperboard 200 7,100 100 37% 900 13%

Source: HMRC *provisional

However, not all print-related businesses fall neatly into the government’s SIC codes for defining business types.

The full impact on employment in print is still to be determined. The most recent BPIF Printing Outlook survey found that while many redundancy decisions “have already been made (and actioned)”, with others put on hold while companies “keep one eye on the job retention scheme and the other on the economic recovery”. 

Kyle Jardine, BPIF economist and Northern Ireland manager, said: “The next Printing Outlook survey went live this morning and we will be reporting on this at the start of August – in it we are asking about expected redundancies by the end of September.”

BPIF chief executive Charles Jarrold told Printweek: “The JRS has been vital in protecting valuable jobs in the sector that were at risk as a direct consequence of the impact of the lockdown on levels of demand – in particular on the retail hospitality and leisure sectors, which are such an important part of the sector’s client base.  We welcomed the roadmap for lifting lockdown as it reduces the levels of uncertainty, albeit the dates came with a clear “not before” warning.

“While it’s disappointing that we experienced the postponement to the 19th July, it was always a possibility.  We also welcomed the original decision to extend the JRS through to September, with increasing employer contributions, avoiding a “cliff edge” end, which would cause real damage.”

Jarrold emphasised the importance of the wider reopening to printing industry businesses.

“At this stage, we don’t think that the delay to July 19th merits a rethink on the tapering of the JRS – it supports jobs, but we need to reopen the economy, and the two need to be carefully balanced. 

“If we see further delays, or restrictions that reduce economic activity however, or a slower recovery in demand, the level (or type) of support may need to be reconsidered – that’s what we’ve discussed with government, but hopefully we can get back towards “business as usual” sooner rather than later,” he added.

In July the taxpayer contribution for hours not worked falls to 70% up to a maximum of £2,187.50 per month, in August and September it will be  60% and £1,875.

The Institute of Fiscal Studies said that the cost to an employer of keeping on a worker on a £20,000 salary would rise from £155 per month in June, to £322 in July and £482 in August. 

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