BUSINESS leaders in York and North Yorkshire have welcomed the extension of the UK furlough scheme to October.

Chancellor Rishi Sunak confirmed that workers on leave due to coronavirus would continue to receive 80 per cent of their monthly wages up to £2,500 - but companies would be asked to start sharing the cost from August.

He said greater flexibility would support the transition back to work, with employers able to bring furloughed employees back part time.

There had been growing pressure on the Government to announce changes soon, to prevent employers from having to start making mass redundancies.

Nick Bradley, an ambassador for the Institute of Directors, York branch, said employers had been concerned about the furlough scheme ending at the end of June.

"Directors would have had to think about starting the redundancy process now, to be in place by July. The announcement has given some degree of certainty in terms of furlough and flexibility which was needed."

Carolyn Frank, development manager Federation of Small Businesses, said the extension would provide protection to the local economy from job losses, and help employers to retain staff. She also welcomed the part-time furlough option to enable a gradual recovery."

She said the announcement at the end of May on the proposed employer contributions would need to be affordable for the smallest cash-strapped employers whose income had 'often gone to zero, with ongoing overheads'.

Further support was also needed for self-employed people, she said.

She added: "There is a long way to go to full recovery, but it is encouraging to see businesses adapting and re-opening where possible.

"FSB are pleased to work with partners across the City of York to further support businesses through the coming months and to have welcomed more than 500 new members to our organisation over the last month, fully funded by the council, which we know has provided them valuable additional support to survive.

"A collaborative effort is needed to move to recovery and we know that in York and North Yorkshire there is a strong community of business owners who are ready to rise to the challenge thrown at them, and the extension of the scheme will be just one way that they can have confidence to resume trading in a measured way, supported both locally and nationally."

Michelle Mook, of York-based Pro-Development, said: "At the moment my whole team are furloughed as our business has been severely impacted by Covid-19. The new arrangements will make a huge difference to us and although some of the detail has yet to be confirmed, the potential of being able to have a combined furlough/part time working scenario in the coming weeks will be beneficial to our business."