A union boss has said the extension of the UK furlough scheme comes “too late” for thousands of lost jobs in the North Sea oil industry.
Chancellor Rishi Sunak has announced an extension of the jobs retention programme by five months until the end of March.
The move was welcomed by industry body Oil and Gas UK (OGUK), who said it could be a “vital lifeline” for its members, “enabling them to retain hundreds of workers”.
However, John Boland, regional officer at Unite union, said “thousands” of oil and gas roles might have been saved had the government originally planned to keep the scheme through to March.
Furlough had been due to close at the end of October, bringing numerous jobs consultations for the sector, but was extended to cover a four-week lockdown in England.
This prompted pressure from business and devolved administrations like Scotland for it to be extended more broadly.
More than 8,000 jobs are thought to have already been lost so far from the North Sea, which could increase to up to 30,000 in 2021, Oil and Gas UK has predicted.
Mr Boland said: “It’s too late, to be honest with you. It will be good for people in other industries like hospitality and the airline industry, but for oil and gas, I wish this had come sooner because we wouldn’t have had the people made redundant that we have had.
“There probably will be work coming back up for oil and gas by about March and a lot of the people who have been made redundant would have been able to be kept on the furlough until then.
“So I think it is good for some industries, but from an oil and gas point of view, there’s very few people left, I think, on furlough. Most of them have been made redundant.
“They could have saved a lot more jobs if they’d been a bit more proactive.”
‘Bleeding money’
Chancellor Sunak’s announcement means that, as before, the scheme will pay up to 80% of wages to a cap of £2,500 per month.
However, Mr Boland’s colleague, Jake Molloy of the RMT Union, highlighted many contractor firms were “bleeding money” during the first round of furlough and the extension won’t necessarily solve the problem.
He said: “One contractor quoted us it was costing them in the region of £500,000 a month to have people sitting at home, even though furlough was applied.
“That kind of outlay, without any form of income, just isn’t sustainable.
“For many contractors it will be a case of, well, we can consider it if the clients require and, moreover, if the clients were picking up that cost.
“It may be that the whole tendering, contractual relationship between the contractor and the client has to be looked at in order to facilitate furlough.”
However Mr Molloy said the scheme may give a “glimmer of hope” for those workers currently in job consultations as they look to work returning around March, adding the industry should “look at those opportunities”.
Alix Thom, workforce engagement and skills manager at Oil and Gas UK, said: “We welcome the support the Chancellor is providing today as it may provide a vital lifeline to many of our members enabling them to retain hundreds of workers in our industry.
“Along with so many people facing continuing uncertainty due to Covid-19, our sector faces extra pressures generated by volatile oil and gas prices.
“These challenges inevitably mean recovery will take longer but we are doing all we can to support our supply chain and mitigate against further job losses.”
