Written by: Keith Tully
Updated: 2nd April 2020
Published: 2nd April 2020
As many as 44 per cent of UK companies are planning to furlough 50 per cent or more of their workforces in response to coronavirus crisis.
According to polling by the British Chambers of Commerce (BCC), most companies (62 per cent) have no more than three months’ worth of cash in reserve, with many having considerably less flexibility as far as access to cash is concerned.
The issue is set to become a very acute financial crisis for large numbers of UK businesses, with domestic and overseas revenues having fallen sharply and significantly for operators across very large parts of the economy.
Only 6 per cent of the companies polled by the BCC said they have enough cash set aside to survive for 12 months, while 18 per cent said their cash reserves would last them no more than one month.
Close to a third (32 per cent) of businesses said they intended to furlough between 75 per cent and 100 per cent of their workforces and take up the government’s offer of covering 80 per cent of their employees’ salaries up to £2,500 per month while the crisis period persists.
Just over a quarter (26 per cent) of firms said they were not planning to make use of the government’s furlough and wage support scheme in the coming days.
Most businesses said they are aware of the various support mechanisms that have been put in place by the government in response to the COVID-19 outbreak, including business rates holidays and the business interruption loan scheme.
Hopes are that the awareness of and active engagement with those and other support systems will grow as time goes by and as UK companies continue to operate in a situation of nationwide lockdown.
“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,” said the BCC’s director general Dr Adam Marshall.
“The majority of firms cannot wait weeks or months for help to arrive,” he added.
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