More than half (60%) of the UK’s medium-sized businesses are planning redundancies as a result of the Government’s Coronavirus Job Retention Scheme coming to an end in October, according to new research from accountancy and business advisory firm, BDO.
BDO’s monthly Rethinking the Economy survey of 500 medium-sized businesses across the UK reveals that 89% of those surveyed have already made up to a fifth of staff redundant, with more job losses expected in the coming months. Less than 10% have no plans for any job cuts at all.
Leaders of mid-sized businesses have also expressed concern over funding arrangements, with a third (32%) reporting that as it stands, they can’t continue trading for longer than six months.
It is estimated that mid-sized businesses account for less than 1% of all UK businesses however, they generate £1.4trn in revenues and almost 8 million jobs.
The research also does indicate some signs of resilience and recovery in the mid-market, with more than a third (41%) recording the same or an increase in revenues compared to the same time 12 months ago. Of those surveyed, over half (57%) have either partially or fully reopened their offices or place of work, with 18% remaining open throughout the pandemic.
BDO also found over a third (33%) investing in new technology and more than a quarter (29%) launching new products or services as a result of the pandemic.
Paul Eagland, managing partner at BDO, said: “These figures highlight some of the very tough challenges and decisions businesses are faced with. The leisure and hospitality sector, in particular, is facing the double-whammy of both the furlough support and Eat out to Help out schemes ending.
“The Government took bold action with its furlough policy which has undoubtedly saved many jobs and businesses.”
He added: “However, the harsh reality is that these are unprecedented times and we would encourage the Government to introduce policies that will help UK business survive and ultimately compete internationally – other governments around the world are and will be introducing policies to protect their businesses – we must not fall behind, particularly with Brexit looming.
“We would ask the Government to ensure policies support mid-sized businesses; they are vital to the UK and provide around one in three jobs. Unfortunately they can often fall through the cracks of government policy which is traditionally aimed at larger or smaller businesses.”