Some 140,000 applications were made today for assistance under the government’s furlough scheme – with businesses applying at a rate of 17,500 an hour.
Chancellor Rishi Sunak revealed at the Downing Street daily briefing that initially there had been 67,000 claims in the first 30 minutes of the HMRC portal opening.
However, with more than nine million people expected to be placed on furlough by employers up and down the country – and around 2.3 million businesses expected to make claims, the current rate of claims could mean one million firms wouldn’t be able to make the claims they need in time for paying staff at the end of the month.
Jim Harra, chief executive of HMRC, said he was ‘very confident’ the system would work after it had been ‘tested at volume’.
Reports in the Sunday papers suggested it was capable of having 450,000 people online an hour, so the fact so far today 140,000 claims have been made suggests it is struggling with demand.
There are already reports of businesses failing to access the portal on the first day and the system crashing under the sheer weight of traffic.
Speaking to BBC Breakfast, Harra said: ‘Of course, there is a limit to the capacity of the system. But employers can claim any time over the next few days, between now and Wednesday, and we will have the money in their bank account by April 30.’
That suggests those businesses who fail to make an application by Wednesday will not get the money in time to pay staff by the end of the month, causing potential cash flow pressures for firms
Adam Marshall, director general at the British Chambers of Commerce, said: ‘With April’s payday approaching, it is essential that the application process is smooth and that payments are made as soon as possible. Any delay would exacerbate the cash crisis many companies are facing and could threaten jobs and businesses.’
Dan Tomlinson, an economist at the Resolution Foundation, said £4.2bn could be claimed today alone.
He said: ‘The sheer scale of applications for the Government’s Job Retention Scheme on its opening day shows just how badly the scheme is needed.
‘The next challenge is to make sure the payments to firms get made as swiftly as possible, as the scheme is very much on the front line of protecting both firms and family incomes amid a huge economic crisis.’
Sunak told the briefing this afternoon: ‘Our unprecedented job retention scheme will protect millions of jobs across the country and is now up and running.
‘It’s vital that our economy gets up and running again as soon as it’s safe – and this scheme will allow that to happen.
‘Firms applying today should receive their cash in six working days and HMRC will continue to provide updates on the number of people furloughed.’
Approximately 5,000 HMRC staff are operating the scheme, intended to assist thousands of UK firms, a statement from the Treasury said.
Phone lines and web-chat services will be available to help answer applicants’ questions, with the scheme launching 10 days ahead of schedule, it added.
The launch of the scheme comes as the government was warned of the economic cost for many companies of any delay in its implementation.
Source: PA Media