Drop in redundancy numbers predicted to end

8 Aug 2021
by Sharma Solicitors
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The number of employers making workers redundant each month declined for over a year, according to government statistics published on 6 August.

Insolvency Service data shows that in June 2020, 1,289 employers made 155,576 redundancies and by July this year, 142 bosses made 14,078 employees redundant.

The Service released figures from its Advanced Notification of Redundancy Scheme at a time when the government cut subsidies to its Coronavirus Job Retention Scheme.

The government was paying 70% of wages for each employee’s furlough hours where that was not more than £2,187.50. From 1 August, the subsidy was cut to 60% for furloughed employees up to a maximum of £1,875.

Redundancies will increase

Nonetheless, indications are that redundancies will increase. A survey of 250 businesses by the British Chamber of Commerce revealed that 18% of employers were considering making redundancies because of the subsidy cut.

Meanwhile, figures from the Office for National Statistics (ONS) show that certain sectors were more likely than others to experience redundancies.

Sectors most affected by redundancies between June 2020 and May 2021 were the sale and repair of motor vehicles, at 423,000 redundancies, manufacturing at approximately 368,000, and 265,000 in hotels, lodges and other accommodation that also provides food. 62,000 redundancies were made in the public administration, defence and social security sector.

ONS figures also reveal that the older a worker was the more likely he or she was made redundant. For the 12 months to May 2021, around 894,000 people over 50-years-old were made redundant. For 35 to 49-year-olds, 840,000 were made redundant, 622,000 were between 25 and 34, while there were 373,000 made redundant who were between 16 and 24-years-old.

The government assumed that employers using the furlough scheme would top up any subsidy so that employees received more than 80% of their wages. The furlough scheme is due to end by 30 September. Claims for July 2021 furlough days must be made by 16 August 2021.



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