Foxtons has been criticised by an influential MP for not repaying any of the £4.4 million in furlough cash given to the company since the pandemic started.
Bristol Labour MP Daren Jones (main pic), who chairs the heavyweight Business, Energy and Industrial Strategy parliamentary committee, said yesterday that businesses like Foxtons should repay their furlough cash.
Although there is no statutory reason for the estate agency to do so, he told Yahoo News: “As the business committee has said time and time again, business leaders need to act in good faith when using taxpayers’ money during the pandemic,” he said.
“We have called out businesses who have passed on taxpayers’ money to shareholders, instead of using it to keep workers in their jobs or returning it to the Treasury if it’s no longer required.”
His remarks follow Foxtons full-year results published yesterday which, as well as revealing how much government support it received last year, showed it had spent £3 million on a share buy-back scheme in December and spent £14.5 million buying London rival Douglas & Gordon.
A Foxtons spokesperson says: “Like many customer-facing businesses, 2020 was an extremely challenging year for Foxtons. We were required to close for months during the first lockdown which cut our annual revenue by £15m, equivalent to a fifth of the annual total. We made a statutory loss for the year and will not pay a dividend.
“We very gratefully received Government support via the furlough scheme and business rates relief. We used it as it was intended and for as shorter time as possible. Were it not for furlough we would have had to make lots of short-term redundancies because we were facing a revenue cliff edge. We ended up making no Covid-related redundancies in 2020. Our furloughed staff received money directly from Government during this period and as such there is no surplus to repay.
“We didn’t just rely on Government help to keep the business viable. We made our own cost savings of some £9m, including pay reductions for the highest paid in the business.
“We also raised more than £20m from shareholders to help us through lockdown and provide a cushion against further closures which fortunately did not materialise. We therefore had excess capital, so much later in the year, with the business trading again and with more confidence about the future, began returning some of this to our shareholders in the form of a £3m share buyback.”
Several key rivals have repaid their furlough cash including Knight Frank, Belvoir and JLL.