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Fewer planned redundancies in November as furlough extension kicked in

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There were fewer planned redundancies in November in the UK than at any time since Covid lockdowns began, according to Insolvency Service data.

A total of 36,686 redundancies were proposed last month, down from a peak of 156,000 in June.

However, in the same month last year there were 9,034 fewer planned redundancies, making a total of 27,652.

Employers must notify the Insolvency Service when they plan to make 20 or more workers redundant using the HR1 form so the new figures indicate what is happening months ahead of the redundancy data collected by the Office for National Statistics (ONS).

The BBC obtained the HR1 figures via a freedom of information request.

ONS data showed a record rise in redundancies in the period from August to October, to hit 370,000, a record level.

The repeated extensions to the furlough scheme – now running until at least the end of April – are the likeliest cause of the latest fall in redundancy plans.

November saw a lockdown imposed across all of England, and restrictions in force in Wales and Scotland, as coronavirus levels rose.

Though many businesses were unable to trade in that period, there was not a spike in redundancies such as the one seen after the first lockdown – although the November lockdown was not as strict.

Edinburgh Woollen Mill, Sainsbury’s, Gregg’s and John Lewis were among the companies to announce job cuts in November. However, the closures of the big retailers Arcadia and Debenhams, affecting 25,000 jobs, were probably too late to be included in November’s figures.

November’s figure was up 32% on the same month last year, but far below the peaks seen in the summer.

In October, the number of redundancies planned was up 93%, reflecting fears that furlough was about to end.

The BBC’s figures show 550 employers notified government of plans to cut 20 or more jobs, the lowest figure since April, but still 80% higher than last November.

The mass redundancies that are happening in the retail and hospitality sectors are very worrying and I’m sure there will be more to follow” – Raoul Parekh, partner at GQ|Littler

Those employers that cut fewer than 20 don’t have to notify government.

According to Tony Wilson, director of the Institute for Employment Studies, an extra layer of risk is about to be added by Brexit, which “as it could lead to redundancies in firms and sectors that had been less impacted by the pandemic.”

Raoul Parekh, partner at GQ|Littler, told Personnel Today, felt that despite the extension of furlough, the rapid spread of the new variant of Covid was a massive blow: “Employers who thought they would be able to hang on have had their hopes dashed by the second lockdown, and then a further bombshell of the current Tier 4 restrictions. This is just the latest blow for bars and restaurants.

“The mass redundancies that are happening in the retail and hospitality sectors are very worrying and I’m sure there will be more to follow. Employers feel they need to be cautious, and aren’t prepared to gamble on a V-shaped recovery.”

“But with a vaccine now starting to get rolled out, there is light at the end of the tunnel. We must hope that the current furlough extension enables businesses to hold off on further staff cuts until lockdown is lifted and business can resume.”

“The chancellor seems to have learned from past experience, and businesses will appreciate the early notice of the latest extension of the furlough scheme.”

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