Coronavirus: Huge take up of furlough scheme in NI

By John Campbell
BBC News NI economics & business editor

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ConstructionImage source, Getty Images
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In a survey by the Construction Employers Federation, 100% of respondents said they would be furloughing.

It is now clear that a very large chunk of Northern Ireland's businesses are going to use the government's coronavirus jobs retention scheme.

The scheme allows employers to temporarily lay off staff while the government pays 80% of their wages during the crisis.

In the jargon this is known as furloughing and its aim is to prevent mass unemployment.

Three surveys in the past week point to a massive take up.

Manufacturing NI and the NI Chamber of Commerce both found 80% of firms will furlough some or all staff.

In a smaller survey by the Construction Employers Federation, 100% of respondents said they would be furloughing.

The most recent official figures suggest there are about 572,000 private sector jobs in Northern Ireland.

Even allowing for a much more conservative estimate of 50% take up that would still mean the government stepping in to pay the wages of more than a quarter-of-a million people in the local economy.

So there is a lot riding on this scheme.

Image source, Getty Images
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There are many businesses, particularly small businesses, which are still slipping through the cracks

The man in charge of it, HMRC chief executive Jim Harra, gave a confident performance in front of the Commons Treasury Committee this week.

He told MPs an online application portal should be open on 20 April with money flowing to companies by 30 April.

His main concern was that telephone advice lines could come under big pressure if companies feel they need guidance on the application process.

To lessen that risk, HMRC will publish more guidance on the application process next week.

Getting certainty on this scheme will be a relief for many business owners and employees.

Tales of despair

My emails and direct messages are full of tales of hardship and despair.

On Friday night there was some better news as the Economy Minister Diane Dodds gave details of how an additional £40m of businesses support will be spent.

About 2,500 small manufacturers who missed out on £10,000 grants will now qualify.

A previously announced scheme providing £25,000 grants to the hospitality, tourism and retail sectors now has an opening date for applications - 20 April.

Belfast Chamber of Commerce and other organisations have also been lobbying for small businesses who operate from serviced offices or co-working spaces to be included in the grants scheme, though so far there is nothing for them.

And for plenty of other businesses there has been disappointment and despair.

'Might never reopen'

I was contacted by one firm this week which has seen its market evaporate and is just above the threshold for a £10,000 grant.

The staff have been furloughed but beyond this there is not much more the firm can do other than deferring bills and applying for a government-backed interest free loan.

They fear that having spent 20 years building a business they might never reopen.

The economy minister has acknowledged the gaps in support for companies like this.

There will now be a new "falling through the gaps" fund for businesses not currently able to access existing regional or national grant schemes.

The budget for this fund and its other details are still to be confirmed.

For many people it can't come soon enough.