Chamber calls for targeted financial support as furlough scheme ends

Business leaders in Greater Birmingham today urged the government to offer targeted financial support to those who need it most following the decision to end the furlough scheme and increase the rate of VAT for some sectors.

And Greater Birmingham Chambers of Commerce (GBCC) warned that the travel industry and its associated sectors are likely to face the greatest risk of redundancy.

The government closed the Coronavirus Job Retention Scheme yesterday and ended a temporary reduced rate of VAT for certain areas of hospitality, hotel and holiday accommodation and admissions to some attractions.

From today the reduced rate for these supplies will be replaced by the introduction of a new reduced rate of VAT of 12.5 per cent, which will remain in effect until 31 March, 2022.

Raj Kandola (pictured), head of policy at the GBCC, said: “There 's no denying the vital role the furlough scheme played in ensuring we avoided long term scarring in our labour market as the fallout from the pandemic gripped our region.

“As national restrictions have eased and economic activity has picked up across the board, the fact that there 's still almost a million people on the scheme shows just how important it 's been in literally safeguarding thousands of jobs here in Greater Birmingham and the country as a whole.

“Unfortunately, those returning from full time furlough to sectors that have suffered a huge drop in demand over the last 18 months, such as international travel, are likely to face the greatest risk of redundancy.

“Data from our latest Quarterly Business Report has underlined the financial challenges many businesses are currently facing - the end of furlough and an increase in the rate of VAT are likely to add to the huge cost pressures many are facing right now.

“We would urge the Government to closely monitor the impact these measures are likely to have on businesses in the next few weeks and offer targeted financial support to those who need it the most - particularly, if we are faced with the prospect of any future lockdowns over the coming months.

“Whether it 's the Recovery Loan Scheme or the schemes introduced by Birmingham City Council to help those businesses that missed out on the Restart Grants, the good news is there 's still plenty of financial support on offer to help firms adapt to the new landscape - full details on how to access this support can be found on our website. ”

Click here to access our Covid-19 Support Grid.

Click here to review our latest Quarterly Business Report.

Click here to watch Raj Kandola on BBC Breakfast discussing the end of the furlough scheme.

West Midlands Combined Authority (WMCA) has set out a package of measures to help the region 's unemployed gain the skills needed to get back into work.

With the Government 's furlough employment support scheme ending, and the region 's economy still recovering from the shock of the coronavirus pandemic, the WMCA is stepping in with £25 million-worth of training support to help unemployed people across the region get jobs.

Working with the region 's colleges and providers, the WMCA 's support will be targeted at skilling up people for roles in sectors where jobs are being created - including digital, logistics, health and social care, rail, and construction.

The £25 million funding includes a specific focus on jobs with good long-term prospects, such as teaching assistants, housing officers, and software developers.

West Midlands mayor Andy Street said: “Now, with the Government 's generous furlough scheme coming to an end, it is important we support those who may find themselves falling out of work through no fault of their own. That 's why the WMCA has set out this £25 million support package, including jobs fairs in every borough and sector specific training in growth sectors such as digital and construction.

“It is mission critical we get people back into work following the pandemic and, working with local authorities across the West Midlands, we are doing all we can to make that happen. ”

The WMCA 's £25m package will support training provision, designed with local employers, to give people the skills needed to fill record levels of job vacancies.