The coronavirus pandemic has seen the UK enter and emerge from various forms of lockdown for much of the last 12 months and the emergence of a new strain of the virus has resulted in lockdown three, which is causing concern for local businesses across a range of industries and sectors.
The Office for Budgetary Responsibility (OBR) is predicting that the coronavirus pandemic will have caused the UK economy to shrink by 11.3%, which would be the most significant decline in the last 300 years. The independent forecaster has also predicted that unemployment will peak at 9.7%, which is markedly higher than the 4.9% that was seen in the three months to October.
The Announcement of a £4.6bn Support Fund
In early January 2021, the Chancellor of the Exchequer, Rishi Sunak, announced an additional support package for businesses that have been forced to close as a direct result of the coronavirus pandemic. The £4.6bn fund includes grants worth £9,000 for leisure, hospitality and retail businesses alongside a £594m discretionary fund and additional grants for local authorities that are worth up to £3,000 per month.
Noting that the new coronavirus strain is presenting the country with huge challenges, the Chancellor said that this additional cash injection is intended to support jobs and businesses until Spring 2021.
What this Support Looks Like for Businesses in the South West
Businesses across the South West operating in the hospitality, leisure and retail sectors:
– that have a rateable value of up to £15,000 will receive £4,000
– that have a rateable value of up to £51,000 will receive £6,000
– that have a rateable value in excess of £51,000 will receive 9,000
The funds are being made available on a per-property basis and are expected to help more than 600,000 businesses. Crucially, the £549m discretionary fund has been designed to ensure support is available to impacted businesses in other sectors.
This package of financial support is in addition to the funds available through the Local Restrictions Support Grant schemes for both closed and open businesses.
The Response from Organisations and Business Leaders in the South West
Although business leaders in the South West have welcomed the introduction of an additional package of support for businesses that are being affected by the third national lockdown, they believe the measures don’t go far enough to help the region.
Business organisations in the region are calling for the government to outline a road map and are urging Mr Sunak to extend support packages until at least the end of 2021. Organisations are asking for rates and VAT relief to continue beyond March 2021, and for clarity with specific regard to the support businesses outside hospitality and retail can expect to receive.
The chair of British Chambers of Commerce South West and chief executive of the Chamber of Commerce in Devon and Plymouth, Stuart Elford, has noted that businesses urgently need clear measures of support to prevent them from being forced to make redundancies on a mass scale. Mr Elford went on to say that it is important that businesses aren’t allowed to fail now, as the rollout of the vaccine is providing the light at the end of the tunnel so many having been looking forward to for almost 12 months.
Tim Jones, the South West Business Council chairman, has said that the latest package of support announced by the Chancellor is a “sticking plaster” as the stop and start approach to lockdowns and financial support has impacted the leisure, tourism and hospitality industries deeply. This point has been further illustrated by Mike Cherry, the national chair of the Federation of Small Businesses, who has said that “while this additional financial support will be a lifeline to 600,000 businesses and therefore has value, there is a need for a plan that matches the scale of the economic damage we are seeing”.
The chief executive of the Cornwall Chamber of Commerce, Kim Conchie, has called for a markedly longer period of financial support lasting until March 2022. Mr Conchie also highlighted that it remains to be seen whether supply chain businesses that have not been forced to close but are operating in sectors facing significant restrictions, such as those supplying hotels with food, are going to be included in this latest round of financial assistance.
The regional director of the Institute of Directors in the South West, Robert Lloyd Griffiths, has welcomed the new grant package and is hopeful that it will soften the impact of a third national lockdown [8]. Mr Lloyd Griffiths went on to warn that there is a risk of a cliff-edge in the Spring when the furlough scheme and several other measures of support are due to end.
Looking to the Future
Crucially, Mr Sunak has not ruled out the introduction of further support measures for workers and businesses. The budget is due in early March and it is expected that officials will look broadly at the support that has been put in place and set out the next phase of the government’s response to the coronavirus pandemic.
Tim Bowles, the West of England Mayor, has welcomed the measures and encouraged businesses to make contact with the West of England Growth Hub, which can help with everything from retraining to mental health advice and supporting businesses to move their operation online. Mayor Tim Bowles also highlighted that the West England Combined Authority has made a commitment to deliver an additional £9.4m to support regional recovery alongside a £100m fund for skills and businesses over a four-year period.
From Bath and Bristol to Plymouth and Penzance, South West Businesses are crying out for additional help in order to stay afloat and remain viable after we emerge from the other side of this pandemic. Time will tell if the Government will provide the assistance they so desperately need.
