Nearly 50% of UK firms to furlough half of staff next week

The BCC’s first Coronavirus Impact Tracker, which surveyed a representative sample of 600 British companies, painted a picture of the effects of reducing staff numbers, as well as the lockdown on cashflow and cash reserves.

While the study found almost half of respondents (44 percent) expect to furlough at least 50 percent of their staff in the next week, it also unearthed the following:

• Nearly a third of businesses (32 percent) said they were planning to furlough between 75 and 100 percent of their workforce over the next week;
• More than a quarter (26 percent) were not planning to deploy the scheme;
• The majority of firms (62 percent) have three months’ cash in reserve;
• Some 18 percent of firms reported less than a month’s worth of cash in reserve.

The BCC survey shows that most businesses have embraced new working practices.

Two thirds of firms (66 percent) are using remote working and half (50 percent) are using video conferencing apps. However, 18 percent of businesses had closed operations temporarily and, although no respondents had yet closed operations permanently, both figures are expected to rise in the coming weeks and months.

The most pressing concern for the companies surveyed was the current impact on cashflow. While 44 percent of the respondents said they have between one and three months’ cash in reserve, only six percent reported having enough cash to cover the next 12 months.

BCC director-general, Dr Adam Marshall, said: "While businesses have welcomed the unprecedented size and scope of the government support packages, our findings highlight the urgent need for that support to reach businesses on the ground as soon as possible. The majority of firms cannot wait weeks or months for the help to arrive."

He added: "There’s no escaping the scale of the challenge UK businesses are facing, yet many are already finding ways to contribute to the national effort to tackle the coronavirus pandemic. Members are working together to play their part, including by gathering unused PPE equipment from local businesses and delivering them to the NHS."

Most of the companies were well aware of the various government support on offer; 57 percent knew about the statutory sick pay refund, 61 percent know about the business rates holiday for the retail, hospitality and leisure sector and 59 percent knew about business interruption loans.