SOME businesses are using the furlough scheme to “kick the can down the road” and keep unviable jobs going, it has been claimed.

The chancellor’s scheme for supporting jobs has been extended to the end of September, with the Treasury’s contribution is due to be reduced in July and tapered out after that.

But Gemma Murphy, director and human resources consultant at Ringwood-based ViewHR, said many jobs protected by furlough were unlikely to viable.

She said: “We have had the unfortunate job of working with many businesses who have had to make redundancies during the pandemic. On the positive side, this has allowed the businesses involved to be sustainable so that they can focus on what they have left and the skills they have to help grow their businesses.

“Whilst the opportunity to keep more people employed on furlough longer is of course wonderful, I cannot help but think that many businesses are kicking the can down the road. Ultimately, the furlough scheme exists for what will be viable jobs down the road but instead there are strong signs that many unviable roles are surviving just because of the scheme.

“I would encourage businesses to really look at the roles they currently have furloughed and whether or not they are viable once furlough ends.”

She said this would help firms to understand their business model and make plans.

Furloughed employees still incur costs such as accrued holiday, length of service obligations and the introduction of employer contributions, she said.

“If ultimately employees will have to be made redundant, the costs will become higher as service increases as there may be the risk of claims,” she said.

“We have all learned a lot through this pandemic and certainly businesses have had to change. It is important as business owners that we review what steps our businesses need to take over the coming months and the structure our businesses need to take.

“If a business does need to make redundancies, it is critical that they follow a fair and reasonable redundancy consultation process. Failure to do so will in the long run result in costly claims in the employment tribunal. So many businesses try to save money and take short-cuts at the restructuring stage only to have to pay it back in compensation costs later. This can be crippling to a business.”

The Bournemouth office of insolvency practitioner Antony Batty & Company backed her observations, saying: “Although the Insolvency Service’s latest figures for formal corporate insolvencies show that business insolvencies fell by nine per cent to 686 in February 2021 compared with January’s figure of 754, our view is that these figures mask the ongoing problems faced by many businesses, who are surviving only because of the various government support packages and the protection in place against aggressive debt recovery actions, for example.

“Anecdotally, we are aware that pressure is mounting on many businesses that are just about surviving as their debts grow due to Covid-19. As the withdrawal of the support and protection packages starts to loom, it is difficult to see the second half of 2021 bringing anything other than even greater challenges to businesses.”