FSB NI proposes Furlough Cost Support Scheme

Press Releases 28 Jan 2021

Roger Pollen outlines a plan to ensure businesses are supported and jobs retained

FSB NI has called on the Northern Ireland Executive to protect jobs and support businesses by introducing a Furlough Cost Support Scheme. The proposal, which has been shared with Ministers, aims to assist firms with the ongoing costs of using the Furlough scheme by providing a payment to businesses per furloughed employee.

Commenting, Head of FSB Northern Ireland, Roger Pollen said:

“The Furlough scheme has undoubtedly been a successful intervention which has, so far, prevented mass unemployment across the UK. However, despite common misconceptions, using the scheme is not cost-free for businesses. Employers are required to pay Employers National Insurance Costs, Pension Costs, and also accrue holiday pay for their workers. Thus, the ‘actual cost’ to the employer of using the scheme is generally in excess of 20%.

“With reserves used up and debt accrued, businesses are telling us that the ongoing cost of using the Furlough scheme is causing significant pressure, and without any further action they may regrettably be forced to make staff redundant.

“In a bid to remedy this situation, FSB has designed and proposed a Furlough Cost Support Scheme to assist businesses and to ensure that viable jobs can be protected until trading conditions improve.

“The scheme would be of substantial benefit to businesses, workers and the wider economy, so it has broad appeal. The level of funding required to implement the scheme is entirely achievable within the resource spending which is available to the Northern Ireland Executive to spend in this financial year.

“We look forward to working with Ministers and Officials on the further design, implementation and rollout of the scheme.”


Notes to editors  

  1. The Furlough Cost Support Scheme is based on the NI Executive paying a grant to employing businesses, per employee retained on furlough, per month, calculated at a level that recognises average Employer NICs of 8% plus pension at 3% plus holiday pay 12.07%, and calculated on 80% of NI median earnings. This amounts to £430.63 per month per employee. If we assume that claims are made for the entire 94,800 furloughed workers as at 31 December 2020, over a three month period this amounts to £122.47 million.