Numbers of furloughed Luton workers continue to wind down in May

As of July 1, employers must pay 10% of the salary for furloughed staff, rising to 20% in August and September, when the support scheme ends.

But there are fears many businesses will not be able to afford the cost with parts of the economy still restricted by Covid measures.

The latest figures from HM Revenue and Customs show that 10,600 jobs held by workers living in Luton were furloughed in May.

That was 1,900 fewer than the 12,500 furloughed at the end of April.

The reduction coincided with an easing of restrictions which led to the reopening of indoor entertainment and hospitality, along with holiday accommodation.

The figures show that in May in Luton:

Furloughed jobs in the retail sector dropped by 680, to 1,460

In the arts, entertainment and recreation sectors, 240 fewer jobs were supported by the scheme, with 440 still furloughed

The number of hospitality jobs furloughed fell by 710, to 1,990

Across the UK, the total number of jobs furloughed fell by 1.2 million during May to 2.4 million at the end of the month, the figures show.

The furlough scheme, formally called the Coronavirus Job Retention Scheme, started with the Government paying 80% of a worker’s wages, up to £2,500 per month, if they were not able to work due to the impact of the pandemic.

Employers could choose whether to make up the rest of staff salaries.

The reduction in Government support to 70% with firms now required to pay 10% of furloughed staff salaries will cost businesses £322 in July to keep an employee earning £20,000 a year on the books, according to the Institute of Fiscal Studies.

That could be too much for some businesses, say politicians and business groups.

Labour's shadow chief secretary to the Treasury Bridget Phillipson said: "The Government must make sure economic measures go hand in hand with public health measures and that our British businesses and high streets are not left out in the cold.”

Meanwhile, British Chambers of Commerce director general Shevaun Haviland said: “The taper of government payments into the furlough scheme should be immediately deferred until we take the final step in the road map, and further grant support should be extended to the worst affected businesses.”

The Government has spent £66 billion on the furlough scheme since it started in March last year.

A spokesperson said: "We deliberately went long with our support to provide certainty to people and businesses over the summer, and that support, which is a substantial amount of funding, is continuing."

They added additional support was being given to businesses through grants, business rates relief and a cut in VAT.

Separate HMRC figures show 13,300 self-employed workers in Luton have received Government cash since the self-employment income support scheme started. The total value of the claims made across the area stood at £114.2 million by June 6.