COVID-19: Furlough scheme being used as state-sponsored redundancy - expert comment
Release Date 20 April 2020
Prof Adrian Bell, Chair of History of Finance at the ICMA centre at the University of Reading said:
"The announcement of extending the furlough scheme to four months is going to be used by a number of companies to support redundancy schemes for firms that have failed since lockdown including the Arcadia group which won’t be reopening once restrictions lift. Rather than spending money received by the Government to support their retail activities and staff, these companies will have more cash to invest in brand building and marketing as they move to bolster their online shopping and fulfillment activities.
"These companies have taken the ‘no strings attached’ money to pay salaries and now look to be using this money to pay notice as well. So it looks everything like state sponsored redundancy now rather than furlough and sadly will lead many workers to be potentially exiting a lockdown scenario into unemployment during the deepest economic recession."