Perth and Kinross had one of the highest take-ups rates of the coronavirus furlough scheme, figures have shown.
One in three workers eligible for the scheme in Perth took advantage of it, the second highest uptake rate in the country at 33%.
More than 22,000 of the 67,300 workers in the area took part in the programme.
Angus had an uptake of 29%, with 14,700 out of an eligible 50,500 taking part, while Dundee registered 17,700 on the scheme out of a possible 63,200 — 29% of the city’s workforce.
In Fife, 28% or around 45,000 people took up the furlough offer, from a possible 160,700 people.
Dundee City Council leader John Alexander said moves had to be taken now to mitigate the number of job losses which could occur once the scheme is removed in October.
The Highland council area had the highest rate of uptake in Scotland, with more than 34% of the workforce there being placed on furlough.
More than 736,500 members of the Scottish workforce — around 30% — were placed on the scheme.
The take-up in England was also around 30%, at more than 7.6 million workers.
GDP shrinks in first quarter
As the scale of Scotland’s furlough scheme plays out, the Scottish Government announced on Wednesday the economy had shrunk in the first quarter, with GDP reducing by 2.5% between January and March this year, compared to October to December 2019.
The furlough scheme and country-wide shut-down was introduced on March 23, with the government noting the latest GDP figures for quarter one do not take into account the “large fall” in productivity monthly stats recorded in April.
GDP across the UK fell by 2.2% using the same comparative months.
Small businesses “key” to recovery
In many instances, smaller businesses took-up the chance to furlough employees, according to the Federation of Small Business (FSB Scotland)
Andrew McRae, FSB Scotland policy chair, said: “Employers in our big cities, small towns and rural areas alike have taken advantage of the UK Government’s furlough scheme. Similarly, firms across the country have benefited from the Scottish Government’s coronavirus support initiatives.
“While these lifeline schemes are imperfect – and we still look for policymakers to close gaps where they exist – they undoubtedly saved many firms and jobs during the difficult months of spring and summer 2020. But there is a long way to go and we are seeing a jobs crisis unfold before our eyes.
“After the last crash, nine in ten unemployed people that re-joined the workforce did so via a small business or through self-employment. We want governments in Edinburgh and London to give these operators the tools to play their part in the recovery.
“That’s why any new jobs guarantee – as recommended by the Higgins review – must put smaller firms at its centre.
“And as the Chancellor considers spending moves to power the recovery, he could do worse than reducing employers’ national insurance contributions to make it easier for firms to take on and retain workers.”
Health and economic threat remains
Dundee City Council SNP administration leader John Alexander said the full impact of the withdrawal of the furlough scheme was yet to be assessed, with the councillor admitting he was fearful of how it would impact the city’s future economy.
He said: “The figures illustrate the scale of the challenge facing all areas and how important financial support is for businesses during this global pandemic. The threat, both in terms of the health impacts and economic, remains and we cannot be complacent. What we do now will determine how many lives and jobs will be protected.
“Very early on in this crisis, we identified that after the trauma and heartbreak of the health impact, the city would likely face a mammoth economic crisis.
“That’s why we’ve been working with partners including the Chamber of Commerce, broader business and major public employers on an action plan to seek to support existing business and the wider economy.
“Sector action plans such as the recent tourism plan have also been developed to best support employment in the city.
“We are yet to see the full impact of the gradual withdrawal of the furlough scheme and I remain worried and anxious about the impact of removing that support in its entirety. We must all do as much as we can to protect what we have, in terms of employment, in the longer term.”
Scottish Conservative MSP for Mid-Scotland and Fife Murdo Fraser called on the Scottish Government to do more for small businesses.
He said: “These figures show the importance of the UK Government’s furlough scheme. A 33% take-up rate in Perth and Kinross does not surprise me – once again it demonstrates the enormous financial commitment made by the UK Government to Scotland during Covid-19 and also demonstrates the importance of the Union.
“We recently heard from Steve Barclay, chief secretary to the Treasury, that the SNP Government will receive an additional £1.9 billion of extra funding to deal with the impact of the virus.
“The UK Government has helped millions of workers through its furlough scheme. It would be good to see the SNP Government provide similar help to small businesses, which it can do by using funds from its own budget.
“The Conservative Party are known for helping small businesses – it is time the SNP Government did likewise, especially at unprecedented times like we are experiencing just now.”
Package of support
Finance Secretary Kate Forbes said: “The economic implications of Coronavirus continue to be significant and we have put in place a package of support worth more than £2.3 billion. Our support has taken into account the specific needs of Scotland, and our key sectors. That tailored approach is continuing as businesses safely reopen and today we are setting out details of further support for our tourism industry.
“We could do more, for even more sectors, if we had additional fiscal flexibilities, such as the ability to borrow. Unlike the Scottish Government, the UK Government have access to the borrowing powers that are required to respond to a crisis like coronavirus (COVID-19).
“We still need urgent agreement on fiscal flexibilities in order to provide further much needed funding to support the dual economic impact of Covid and the end of the EU transition.”
New hotel fund
Tourism secretary Fergus Ewing announced a £15 million fund from the Scottish Government for the country’s beleaguered hotel industry, an industry many furloughed workers are employed.
Mr Ewing said the scheme would help protect some 3,000 jobs across the country in larger hotels until summer of next year.
He added: “We recognise the important contribution the hotel sector makes to tourism and the wider Scottish economy, supporting approximately 46,000 jobs across the country.
“Scotland is home to many of the world’s iconic hotels and they, like much of the sector, have suffered considerably this year from the impacts of coronavirus.
“The Hotel Recovery Programme is a dedicated funding package designed to safeguard jobs in these establishments and offer some security until the new tourist season begins in summer 2021.
“The Scottish Government is doing everything in its power to support the tourism industry, however without significant borrowing powers at our disposal this action will always be limited.
“While we very much welcome measures taken by the UK Government, such as accepting our call to cut VAT rates for the tourism industry, longer-term support for jobs is necessary. I hope the UK Government responds positively to our ask for an extension to the Coronavirus Job Retention Scheme.”