Ministers were urged to rethink measures to avert mass unemployment after companies warned in a survey on Wednesday that they would not use schemes set out by the government last month to protect jobs.
Rishi Sunak, the chancellor, unveiled a package of measures in his summer statement to support jobs across the UK that the government said would give businesses the confidence to retain as well as hire workers.
His plan for jobs included a £1,000 “bonus” for companies for each furloughed worker they bring back, as well as a subsidy to cover some of the pay for young people, and grants for apprentices and trainees.
But according to a survey of more than 500 companies by the British Chambers of Commerce, only 43 per cent said that they would seek the furlough bonus and far fewer stated they intended to use the other schemes.
Executives warn that many more jobs will go in the autumn after the expiry of the furlough programme, which has helped support the wages of more than 9m workers.
The BCC said the measures in Mr Sunak’s summer statement had failed to provide support at the scale needed to protect jobs. Almost a third of companies expect to cut their workforces in the next three months, according to the BCC.
Some businesses are sceptical of the £1,000 furlough bonus for staff because it costs much more to bring them back into the workplace. Mr Sunak’s other job support schemes face low take-up partly because many companies have no intention of recruiting as the pandemic drags on.
More than half of companies in the BCC survey said they would not use the chancellor’s Kickstart scheme, which will cover the minimum wage and national insurance for 25 hours a week for young workers on universal credit.
More than 60 per cent said they did not intend to use grants for employers that take on trainees, and a similar proportion stated they did not plan to call on support for those that hire apprentices.
The BCC survey was conducted between July 20 and July 24, about two weeks after Mr Sunak’s summer statement.
A Treasury spokesman said: “This survey does not give an accurate picture of the take-up of the support announced last month as it was carried out before the publication of much of the relevant guidance and the engagement with business.”
He added that it was a “small sample size in the context of the 1.2m employers who have been supported through the furlough scheme”.
The lack of enthusiasm for the government’s job protection schemes shown in the BCC survey comes despite continued evidence that businesses are struggling in the pandemic.
More than half of companies reported a fall in cash flow in July, according to the survey, despite the easing of lockdown restrictions that had prevented many businesses from trading.
The BCC called on the government to reduce the costs of employing staff, in order to preserve as many jobs as possible, such as through an increase in the threshold for companies’ national insurance contributions.
“Expected usage of schemes announced in the summer statement is relatively low, indicating they do not provide the right kind of support for many businesses at this critical time and a rethink is needed,” said Claire Walker, BCC co-executive director.
“With confidence and demand not returning at the scale firms need, the government must take radical steps to slash the tax burden around employment to help companies pay valued staff.”
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