One of the few areas so far in the pandemic you can’t fault the government on is the furlough scheme and how they protected jobs over the summer.
Realistically though they can’t continue support anywhere near that level going forward because if the only way you’re keeping a job is based on the Government paying a huge chunk of your wage then at some point those people are going to lose their jobs, be it now or in 6 months. I think I read somewhere the German job protection scheme will costs approximately €31 billion by the end of 2021, where as the furlough scheme has already cost the UK £39 billion upto now.
I can’t really see what else they could do here, at some point this is all going to have to be paid back
From the government's point of view that headline 'cost' of the furlough shouldn't be the key consideration though. Even looking solely at the economics of it, the key consideration is how the cost of furlough compares to the cost of the alternative. For example:
If furlough ends and X number of people lose their jobs, how many additional service jobs are lost due to the decline in consumption caused by X people no longer having disposable income? When those people lose their jobs how does that further affect the service industry (and when does that spiral end)? How much would HMRC lose in sales tax due to the decline in luxury goods consumption? How much would HMRC lose in income tax/NI because of the job losses? How much would it cost DWP if a significant proportion of the newly unemployed apply for Universal Credit? How much would it cost to employ the number of staff/pay the overtime required to process that many claims? What would be the impact on the wider Civil Service if, as is already happening, DWP has to borrow staff from other departments to cover the caseload? How much would it cost the government if the end of furlough caused a few major contractors to go under and they had to find and negotiate new deals in this climate?
And then, at the end of the day - how much would the government need to invest into the economy to re-create the jobs it could have saved by extending furlough?
There are thousands of other ways massive job losses could cost the government more money in the long term (additional burdens on healthcare and policing spring to mind). Obviously I don't know the answers to all those questions, but the point is that it's not as simple as saying
'this is costing £Xb so it isn't sustainable' as if furlough exists in a vacuum and the alternative is cost-neutral.