The government’s extension of the UK Job Retention Scheme has prevented nearly 600,000 business closures, research has found.
In his Budget, Chancellor Rishi Sunak extended the furlough scheme to the end of September.
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A YouGov survey of 1,000 senior business decision makers at small- and medium-sized enterprises (SMEs), commissioned by Hitachi Capital Invoice Finance, has found that more than one in 10 (12 per cent) SMEs would have been at risk of closure had the scheme ended in April.
14 per cent of business decision makers agreed they would have needed to make redundancies had the scheme not been extended and almost a third (30 per cent) of SMEs disagreed that their business would have survived without the furlough scheme.
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This was highest among businesses in the North West (34 per cent), East of England (34 per cent) and West Midlands (32 per cent).
Hospitality and leisure (27 per cent) topped the list of the industries with the highest risk of SME closures when furlough support ends.
This was followed by manufacturing (16 per cent), IT and telecoms (13 per cent), media marketing (11 per cent) and construction (11 per cent).
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“With nearly six million SMEs operating across the UK, the government’s extension of the Job Retention Scheme will be welcome news to hundreds of thousands of businesses across the country,” said Andy Dodd, managing director at Hitachi Capital Invoice Finance.
“The furlough scheme has provided an essential lifeline for so many businesses, especially to those industries most affected by the crisis.
“Our research highlights just how important it has been for SMEs, so it’s great that the government has decided to extend the scheme further, protecting jobs and even businesses from failing.
“Of course the furlough scheme isn’t the only government support available to SMEs during Covid and I’d urge business decision makers to analyse the full range of support available to them to ensure their business is as strong as possible.”