Businesses across the UK planned more than 300,000 redundancies in June and July as coronavirus wreaked havoc on the economy, new figures have revealed today.
The crisis hammered UK firms as 1,888 British employers planned 156,000 job cuts in June, a sixfold increase on June 2019.
Some 1,784 firms made plans to cut nearly 150,000 jobs in July – almost a sevenfold increase on July 2019 – according to an FOI by the BBC.
The lay-offs have continued as Virgin Atlantic announced more than 1,000 additional job cuts on Friday, becoming the latest company to lay off large numbers of people.
It joined Costa to bring the total number of jobs lost in major redundancies to 2,800 last week alone.
The scale of the Covid-19 jobs bloodbath has been laid bare as new research suggests more than half of medium-sized businesses are planning job cuts as the Government’s Job Retention Scheme comes to an end in October.
Cafe chain Costa has said 1,650 staff are at risk of redundancy as it looks to cut costs amid continued uncertainty over when trade will fully recover following the pandemic
Coffee and sandwich chain Pret a Manger confirmed it has axed 2,800 roles from its shops
Pizza Express closing reveals the 73 restaurants it is shutting for good – one in six of its UK sites – as 1,100 staff look set to lose their jobs
Ailing Pizza Express has confirmed it plans to permanently shut 73 of its restaurants, putting 1,100 jobs at risk.
The closures span Aberdeen to Torquay, including its original site in Wardour Street in Soho, London, which opened in 1965.
Other sites across major cities including Birmingham, Bristol and Edinburgh are also set to stay closed for good.
The closures will affect one in six – or around 16 per cent – of its UK sites.
The company has said it will try to look for redeployment opportunities for staff affected by the closures.
Pizza Express’ branch in Woking, Surrey, is not on the list of the 73 restaurants due to close. The Woking branch was mentioned by Prince Andrew during his televised interview with the BBC’s Emily Maitlis last year.
It is the latest in a raft of casual dining chains, including Zizzi-owner Azzurri Group, Byron Burger, and Frankie & Benny’s owner The Restaurant Group, to shut sites after being hit by lockdown.
Pizza Express has 355 restaurants open across Britain, and over 30 more restaurants and music venues are scheduled to reopen in the coming weeks.
Nine out of 10 firms surveyed by business advisory firm BDO said they had already made up to a fifth of their staff redundant.
More job losses are expected in the coming months, with fewer than 10% of respondents saying they have no plans for any job cuts.
Leaders of mid-sized businesses expressed concern over funding arrangements, with a third saying they can’t continue trading for longer than six months, said the report.
Two out of five respondents reported the same or an increase in revenues compared to the same time last year.
Over half of those surveyed said they have either partially or fully reopened their offices or place of work.
Paul Eagland, managing partner at BDO, said: ‘These figures highlight some of the very tough challenges and decisions businesses are faced with.
‘The leisure and hospitality sector, in particular, is facing the double-whammy of both the furlough support and Eat out to Help Out schemes ending.
‘The Government took bold action with its furlough policy which has undoubtedly saved many jobs and businesses.
‘However, the harsh reality is that these are unprecedented times and we would encourage the Government to introduce policies that will help UK business survive and ultimately compete internationally.
‘Other governments around the world are and will be introducing policies to protect their businesses.
‘We must not fall behind, particularly with Brexit looming.’
The casual dining sector also suffered immeasurable losses amid the pandemic.
Chancellor Rishi Sunak’s Eat Out to Help Out Scheme gave the hospitality sector a boost last month, but many casual dining chains look set to struggle as winter rolls in. Many chains in the sector faced dwindling profits and sky-high costs well before lockdown.
The owner of Ask Italian and Zizzi restaurants plans to close 75 of its restaurants, putting 1,200 jobs at risk. Meanwhile, Casual Dining Group, the owner of Bella Italia, Café Rouge, and Las Iguanas, closed 91 restaurants when it collapsed into the hands of administrators in July.
Back in June, The Restaurant Group, which owns Frankie & Benny’s and Garfunkel’s, said it would close up to 120 restaurants, with nearly 3,000 jobs lost.
Up to £3.5BILLION of furlough cash has been lost to fraud or handed out in error, HMRC reveals before scheme is axed next month
Up to £3.5 billion of furlough cash may have been paid out in wrong or fraudulent claims, according to official Government estimates.
HMRC has calculated that between five per cent and 10 per cent of payments may have been either stolen or paid out in error.
The total bill for the state subsidy scheme currently stands at more than £35 billion.
The job retention programme is now being wound down and will be scrapped entirely by Chancellor Rishi Sunak at the end of October.
Jim Harra, the top civil servant at HMRC, told the Public Accounts Committee this afternoon that his staff believe between five per cent and 10 per cent of furlough cash might have gone to the wrong places.
‘We have made an assumption for the purposes of our planning that the error and fraud rate in this scheme could be between five per cent and 10 per cent,’ the permanent secretary said.
The Government has so far paid out £35.4 billion in furlough cash, according to the latest official figures.
If HMRC’s working assumption proves to be accurate it will mean that somewhere between £1.75 billion and £3.5 billion could have been paid out by mistake or as a result of fraud.
‘That will range from deliberate fraud through to error,’ Mr Harra said.
‘What we have said in our risk assessment is we are not going to set out to try to find employers who have made legitimate mistakes in compiling their claims, because this is obviously something new that everybody had to get to grips with in a very difficult time.
‘Although we will expect employers to check their claims and repay any excess amount, but what we will be focusing on is tackling abuse and fraud.’
Former Conservative leader Sir Iain Duncan Smith hit out at the news last night.
He said: ‘This is a huge amount of money and demonstrates exactly why the scheme needs to be brought to a close.
‘It’s rapidly being defrauded more and more because employers are making furloughed people work and telling them they can’t say anything or they’ll lose their jobs. The scheme is open to fraud and abuse and it’s hard to check where the money is actually going.
‘The sooner we bring this scheme to an end, the sooner we can stop haemorrhaging money and get the country back to work.’
Fellow Tory MP Andrew Bridgen said: ‘This was always a clear and present danger when this generous support scheme was put in place.
‘I would just urge HMRC to be relentless in its pursuit of fraudulent claims made by those who have perpetrated this crime against the taxpayer at a time of national emergency.’
It is the first time HMRC has spoken publicly about the level of potential fraud that could have been committed as part of the job retention scheme, which covered up to 80 per cent of an employee’s salary, up to £2,500 a month, while they were on furlough.
The Government rolled out the massive scheme at breakneck speed, causing many experts to warn that a certain amount of fraud was inevitable.
Furlough is now winding down and will end for good next month.
However, businesses who bring staff back from furlough will receive another £1,000 if the employee is still in work by the end of January.
By August 16 this year, 9.6 million people had been put on Government-supported furlough, with 1.2 million employers claiming the support.
Meanwhile, around 2.7 million self-employed people have claimed around £7.8 billion in support from the Government.
Mr Harra said that an academic study has estimated that the level of fraud and error might be even higher than 10 per cent.
How more than 190,000 jobs have now been lost or are at risk amid the coronavirus pandemic
Here is a list of some of the major British employers that have announced major job cuts since the start of the lockdown.
Major potential job losses announced since March 23: 191,069