BUSINESSES in Dorset have welcomed the chancellor’s announcement that the government’s furlough scheme will be extended for another four months.

But there is concern about the impact on the hospitality industry if businesses have to contribute significantly to the costs from August.

The chancellor said the job retention scheme would be continued until October, with furloughed employees paid 80 per cent of their wages up to a maximum of £2,500 a month.

From August, staff will be able to return to work part-time and still receive their salary. But employers will be asked to contribute to the payments made to those who return to part-time work.

Mark Cribb, founder of the Urban Guild hotel and restaurant venues in Bournemouth, said: “I think it’s very generous. I wish we had the opportunity to bring back people part-time sooner.”

He is currently running a drive-through service which could employ some of his staff for a couple of days per week – and he said leaving them on furlough “does not feel like the right thing to do”.

“However, there’s no getting way from the fact that it is a very generous support package for the team. We just need some better support for the businesses – such as raising the bar by removing the £51,000 rateable value limit to access a grant,” he added.

Andy Lennox, former boss of the Koh Thai chain and now of the Poole restaurant Zim Braai, said he “very much” welcomed the extension to furlough but “there is still a lot of work to be done” to support hospitality businesses who now faced a opening “much later in the year”.

Kate Nicholls, chief executive of UK Hospitality, has warned that the government may need to extend its full furlough subsidy for some firms.

She said: “The full 80 per cent may need to be extended past July for some businesses in sectors like hospitality that will still operate at much reduced levels of trade, or not yet be able to open.”

Ian Girling, chief executive of Dorset Chamber of Commerce and Industry, said the extension “will be hugely welcome” for businesses.

He said the freedom for some staff to return part time was a “really positive step and many businesses will be welcoming that”.

He added: “However, from August, businesses will be expected to contribute to the cost of that furlough scheme. We’re waiting for more details to come out at the end of May. We don’t know where the government cap will be at this time.”