FEARS have been growing many thousands of people could be made redundant as the furlough scheme gradually phases out reports The Evening Standard.

From Sunday, employers will have to contribute 20 per cent towards the wages of furloughed staff which rises from 10 per cent.

However, a survey suggests one in five companies still using the furlough scheme are planning to let staff go as a result.

The Treasury is also preparing to fully end the scheme by October.

The British Chamber of Commerce (BCC) polled 250 businesses with employees still on furlough.

Of those, 18 per cent said they were now more inclined to make staff redundant while 25 per cent would decrease working hours or move staff to part-time patterns.

Despite these concerns, almost 40 per cent said the change would have no impact on the business.

Official data shows 1.9 million people were still furloughed by the end of June, a decrease from 2.4 million a month earlier.

Of those, 18 per cent said they were now more inclined to make staff redundant while 25 per cent would decrease working hours or move staff to part-time patterns.

Despite these concerns, almost 40 per cent said the change would have no impact on the business.

Official data shows 1.9 million people were still furloughed by the end of June, a decrease from 2.4 million a month earlier.

Jane Gratton from the British Chamber of Commerce (BCC) said: “Today’s changes to the furlough scheme will likely result in many thousands of people being released back into the labour market, as employers who are still struggling to recover from the recession are forced to make redundancies and cuts to working hours.

“With widespread skills shortages across the economy, some will find new jobs where their skills are in demand, while others will need to retrain for opportunities in a different sector.

“Whether furloughed workers are returning to the workplace or the wider labour market, it is crucial that employers and the government give them the support and training they need to be re-engaged and productive.”