UNIONS are calling for a reboot to the furlough scheme to avert an autumn jobs crisis.

The Tory government plans to reduce the amount of support offered through the scheme in stages from tomorrow before ending it completely in September.

But union leaders have warned that, with infection rates rising and three million workers still on furlough, the government must rethink its plans on reducing support.

They fear that the upcoming drop in the government’s contribution from 80 per cent of wages to 70 per cent, leaving businesses to make up the shortfall, could push fragile employers to the wall.

Unite assistant general secretary Steve Turner said: “If the government tells us we now must ‘live with Covid,’ then we need the systems in place to help protect jobs as employers look ahead to continued uncertainty. 

“That means proper furlough support for all workers, including freelancers and others excluded, coupled with sick pay that allows workers to support themselves and their families if they are ill.”

Mr Turner said the country had invested billions into the recovery but that this will be wasted if ministers “pull the rug” from under businesses too soon.

“It’s not time to ditch the scheme we won 15 months ago but to reboot it,” he said.

“This is not the moment for ministers to run out of ideas and imagination, because these coming months will be a huge challenge for fragile businesses.”

The TUC has also urged ministers not to “pull the plug” on the nation’s economic recovery by cutting off support for businesses and workers too early.

New analysis published by the trade union body today reveals that employment in hard-hit sectors is struggling to recover to pre-pandemic levels.

Just one in eight of the 790,000 jobs lost in manufacturing, retail, hospitality and the arts during the pandemic have been recovered, the TUC found.

By contrast, it found that nearly all of the jobs lost in business services and administration have been recovered.

Its analysis shows that six in 10 workers currently on furlough are working in the sectors hit hardest by continuing restrictions.

The TUC said that if the furlough scheme is ended too quickly, tens of thousands of jobs could be lost in such industries.

General secretary Frances O’Grady said: “Furlough has played a vital role in protecting jobs and keeping businesses running during this pandemic. 

“The government should hold off hiking up employer contributions until all restrictions have been lifted.

“Working families need this certainty now — not a rollercoaster approach to protecting livelihoods.”

The TUC also noted that workers can only be furloughed if their employer decides to use the scheme, which should ensure that support is targeted.

It added that about two-fifths of furloughed staff are now only furloughed for part of the working week and are working for the rest of it, enabling businesses to use furlough to manage their gradual return to full operations.

The unions’ calls come as the Commons public accounts committee (PAC) urges the government to publish the names of businesses that have benefitted from Covid-19 support schemes, including furlough, following concerns that billions could have been lost to their fraudulent use in the first eight months of the pandemic.

Under the bounce-back loan scheme, the government said that banks could give businesses loans of up to £50,000 and that the taxpayer would cover the lender’s losses if the companies did not pay the money back.

The scheme unleashed a huge amount of financial support, but the government now thinks that up to 60 per cent of the £46.5 billion lent under the scheme may never be repaid.

The PAC said that banks responsible for chasing payments did not have the incentives to go after borrowers because of assurances that the government would step in.