Employers to contribute more to furlough payments from 1 August

Employers will have to contribute more towards furlough payments from this weekend as government support continues to wind down.

The scheme, which originally saw the Treasury pay 80% of employees wages up to a maximum of £2,500 a month, is due to end on 30 September.

On 1 July government contributions dropped to 70%, and will reduce further to 60% with a cap of £1,875 from 1 August, with employers expected to cover the difference.

Some hospitality operators have warned support is being cut off too early, with businesses struggling to meet extra payments, while others have blamed furlough for worsening the ongoing staff shortage by limiting the pool of applicants.

Latest figures

Around one-fifth of hospitality staff remained on furlough at the end of June, Treasury figures show. Some 337,800 hospitality staff were still being supported by the scheme, equivalent to 19% of the eligible workforce.

A total of 291,900 accommodation and foodservices staff came off furlough between 31 May and 30 June. This included a reduction of 102,500 in drinks-serving roles and 95,760 in restaurants and mobile food service.

However, the arts, entertainment and recreation sector overtook hospitality as the industry with the largest proportion of its workforce still furloughed. At the end of June some 20% of employees were using the scheme ahead of theatre performances and events being able to resume.

The number of people furloughed across all areas of the economy fell to 1.9 million during the same period, the lowest level since the scheme launched in March 2020 and down from a peak of nine million in May last year.

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