New figures from HM Treasury have revealed that businesses, including a number of major agencies, have returned £1.3 billion in furlough cash, with £300 million returned in the last three months alone.
Buoyed by the UK’s economic recovery since coronavirus restrictions eased and society started to open back up again, the repayments are coming in as more employees return to work and the jobs market and economy bounces back.
The number of people on furlough – officially known as the Coronavirus Job Retention Scheme - has declined to the lowest level since the beginning of the pandemic, with 340,000 people moving off the scheme in July alone.
The scheme, which will conclude at the end of this month having been in place since March 2020, has been tapering since July, with businesses required to pay more and the government less as the scheme winds down.
The Treasury stats show that companies who have overclaimed or decided they no longer need payments received through the Coronavirus Job Retention Scheme have repaid, in total, £1.3 billion to HMRC since July 2020. This has been made through adjustments to claims and the voluntary disclosure service, which will continue into 2022.
“With our recovery underway, it is heartening to see that £1.3 billion in furlough grants have been returned as the economy recovers,” Chancellor of the Exchequer, Rishi Sunak, said.
The Treasury also announced that HMRC is cracking down on those who have fraudulently claimed furlough through its 1,250-strong Taxpayer Protection Taskforce.
In total, the government says the furlough scheme has protected nearly 12 million jobs and supported more than 1.3 million businesses, with 910,000 jobs in Scotland protected, 470,000 jobs in Wales and 280,000 jobs in Northern Ireland.
A number of agency businesses have paid back furlough money this year, including OnTheMarket, Knight Frank, JLL, Belvoir and The Property Franchise Group, as the property industry has bounced back strongly from the pandemic with record levels of activity in the market.
In marked contrast, Foxtons was heavily criticised for not paying back the £4.4 million in taxpayers’ money it took through furlough funding and business rates exemptions, despite what many saw as flagrant expenditure – including the acquisition of rival firm Douglas & Gordon – and fat cat controversy.
Despite a considerable shareholder rebellion, it still paid its chief executive Nic Budden a bonus package which in total approached £1 million. Foxtons has also acquired four lettings books or agencies, costing almost £19 million in total, and in December 2020 announced a £3 million share buyback scheme for shareholders.
In spite of a wide backlash, in both the trade and mainstream media, it has remained defiant throughout, saying earlier this year: “We very gratefully received Government support via the furlough scheme and business rates relief. We used it as it was intended and for as short a time as possible. Were it not for furlough we would have had to make lots of short-term redundancies because we were facing a revenue cliff edge.
“We ended up making no Covid-related redundancies in 2020. Our furloughed staff received money directly from Government during this period and as such there is no surplus to repay.”
At its peak, in July 2020, the number of companies within the property sector using the furlough scheme was 19,000 and equated to 76,000 staff. Previous figures from the Treasury showed that some £265 million in public cash had been claimed by real estate sector employers between November 1 2020 and March 31 2021 alone – with many of those same employers likely already claiming for substantial periods of 2020 as well.
There were still more than 19,000 property professionals on furlough as recently as June, but it seems certain that this number has fallen drastically as the overall numbers on furlough have dipped dramatically, the economy has recovered and more people have been encouraged back to the workplace.
The furlough scheme will finally end on September 30, but experts including the Bank of England are only predicting a small surge in unemployment when it does, with previous forecasts having predicted a much greater increase.
According to estimates from the Office for Budget Responsibility, from March 2020 to the end of September 2021, the cost of furlough will come to about £66 billion - approximately one fifth of the money the government has spent on its Covid response.