'Everyone’s got bills to pay': facing up to end of furlough scheme

Birmingham

After more than half a year with the government helping to pay his wages on the furlough scheme, Luke Roberts is glad to still have a job as Covid-19 puts Britain through the deepest recession on record.

“Everyone’s got bills to pay. It was a scary thought at the start, I wasn’t really sure what’s going to happen or how long it was going to last.”

At the end of this week, Roberts will be among more than a million furloughed workers to see the scheme close. But after an 11th-hour switch by the chancellor, Rishi Sunak, to launch a new system of wage subsidies as the pandemic worsens, he will continue to receive support through a difficult winter ahead.

“It’s good to have that support system there, to have a bit of sense of security in your mind. I’d rather not think about what the alternative would be,” he said.

Roberts has returned to working part-time as training programme manager at Miss Macaroon, a social enterprise company in Birmingham which reinvests its profits from sales of the French cakes into helping unemployed and young adults to gain skills.

Watch: What is the Job Support Scheme and how has it changed?

Related: Economists call for extension of UK's furlough scheme to save businesses

He is one of thousands on the scheme in the city, which has the highest number of furloughed workers in the UK: more than 55,400, according to HMRC figures published last week.

The city – under tier 2 restrictions – is busier than in March, although trade has dipped in recent weeks, says Rosie Ginday, owner of Miss Macaroon.

More help will be needed for businesses and workers, she said, if tougher controls are imposed. “If there is a lockdown – and the number of infections has shot up again – they will have to look at it again, because otherwise how can businesses survive?”

Bryn Evans, an adviser at Citizens Advice Birmingham, said growing numbers of people in the city are seeking support. “We’ve seen a massive increase in the number of queries about redundancy, it seems to be the overwhelming problem we are dealing with. People are coming to us with no job and no income and are having to claim universal credit.”

Local leaders said the number of people on furlough could be due to the city’s youthful, diverse population, as well as large hospitality and retail sector. Lee Barron, regional secretary of the TUC, said: “It’s a young area, and a lot of those young people will have been working in hospitality.

“What we don’t want to see as we come out of the pandemic is a pandemic of poverty left in its trail, with young workers left particularly vulnerable.”

Research from the Resolution Foundation shows one in five 18- to 24-year-olds who were furloughed have lost their jobs, while Birmingham is one of the youngest major cities in Europe, with almost 40% of people under 25.

Katie Hawcutt is among previously furloughed Birmingham workers now out of a job. A professional musician who played saxophone in a Pink Floyd tribute band, Hawcutt toured theatres across the country, and also taught school music lessons part-time. She has now enrolled with the School of Code, a free bootcamp to learn new digital skills.

“Covid hit and all my gigs instantly overnight were cancelled, and all of my teaching stopped. It was really surreal and didn’t really sink in,” she said.

Based at the Custard Factory in Birmingham, but working remotely this year due to Covid, the School of Code is funded by mayor Andy Street’s West Midlands Combined Authority, running 16-week courses to help people switch to a career in IT.

Believing cuts to the arts and the impact of the pandemic have made a music career too difficult, Hawcutt now hopes to find work in tech when the bootcamp ends in January.

“Tech is the one sector that is actually going to grow and thrive. I’m thankful I’ve got other opportunities when so many of my friends are so unsure about what the future holds,” she said.

Related: Furloughed ethnic minorities and young hit hardest by job losses

Hounslow

Before Covid-19 severely reduced international air travel, a plane would take off or land every 45 seconds at Heathrow airport, where losses have soared to £1.5bn in the first nine months of the year.

Today, the skies are quiet, and the residents of Hounslow, the west London borough to the east of Heathrow, are concerned about how the slump in aviation

is affecting their local economy. It is forecast to be among the London boroughs most battered by Covid-19 and the recession.

The number of shoppers using the shopping centre is back to three-quarters of normal levels.

But the story told by the official figures is bleak – 40% of Hounslow’s workforce is now unemployed or furloughed.

The hit to the local economy is expected to total almost £1bn, according to economic forecaster Oxford Economics, and 40,000 jobs are at risk.

The next three weeks are critical for the livelihoods dependent on Freemantle Electrical

, an electrical and mechanical contractor, run by Richard and Liz Freemantle. The business relied on Heathrow airport for 98% of its work.

Maintenance and service contracts worth several million pounds were cancelled in March, and the couple has already made four staff redundant, about a quarter of their permanent workforce.

“We are haemorrhaging money,” said Richard, at the company’s site in Harlington, just half a mile from the airport.

“We are trying to remortgage, we have tried loans and our credit cards are up to the hilt,” he added. “It’s stressful, you don’t sleep, we’re completely mentally destroyed.”

When the government’s furlough scheme ends on Saturday the Freemantles are unclear whether they will still be able to afford to pay their staff under its replacement, the less-generous job support scheme (JSS).

“In three weeks time we don’t know if we will be able to pay the business’s £20,000 weekly running costs,” said Freemantle. “That’s how tight it is.”

Fearful of mounting local unemployment, Hounslow borough council is leading calls for the government to create an aviation communities fund, to support parts of the country dependent on airports and associated businesses.

Seven west London boroughs, as well as Crawley, close to Gatwick airport, and other air hubs including Birmingham, have been disproportionately impacted by the pandemic, according to Hounslow council’s leader Steve Curran.

The effect of the airport slowdown “is tsunami-like, it envelops everything,” said Curran, “the workers at risk are predominantly women and ethnic minorities”.

As part of a wider recovery plan, Hounslow council hopes to create jobs in the green economy, and plans to hold an aviation summit with other affected locations in November. But turning things around will take time, and Curran has a stark warning about the future for places reliant on aviation, without targeted government support.

“There is a huge rise already in people on universal credit, massive. We’ve got to protect these communities, we’ve got to do something for them, they are hardworking people, they are hardworking businesses or we will be facing long-term mass unemployment and all the problems that brings,” Curran said.

South of Heathrow, there is little activity in the warehouse run by freight forwarding firm Sound Moves, which would usually be planning the logistics for world tours for international bands such as the Rolling Stones, or moving West End theatre sets around the world.

“We don’t see an end in sight,” said managing director Martin Corr. “We have experienced people who can service customers, but we have no customers.”

Sound Moves started the year with 31 staff, many of whom live locally, but Corr has made eight people redundant. The remainder are on furlough, with two people working in the office, on a rotating basis.

Ben Lyons, 38, a tour operator at Sound Moves, has spent the last fortnight at work in part-time furlough.He spent three months at home, and used a mortgage holiday to relieve some financial pressure on himself, his partner and two children.

After eight years at the company, he worries for his future and that of the local area. “I feel like I might have to look for a new job next year. There are other air freight roles out there, but there are a lot of people looking for them,” Lyons said.

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