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Chancellors support package not enough to ensure survival of SME sector


A business leader has warned that the Chancellors latest financial package to help firms through lockdown will not be enough to save many small firms from going to the wall.

Chancellors support package not enough to ensure survival of SME sector


"We call on the Government to invest more to save and sustain businesses and jobs as it will cost considerably more in the future to create new ones. Sustain our businesses now or pay later."
Maggie O'Carroll



A business leader has warned that the Chancellor’s latest financial package to help firms through lockdown will not be enough to save many small firms from going to the wall.

Chancellor Rishi Sunak announced the latest support measures following Prime Minister Boris Johnson’s order in his Monday evening TV address for England to enter a third national lockdown in a bid to avoid spiraling coronavirus infections due to the new highly transmissible strain.

Following the broadcast many business leaders questioned what support was available to sustain struggling firms through the latest period of enforced closures.

And, just over 12 hours later, the Chancellor announced his latest £4.6bn package of funding, saying: “Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring.

“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.

“A further £594m is also being made available for local authorities and the devolved administrations to support other businesses not eligible for the grants that might be affected by the restrictions.”

He added: “Businesses should apply to their local authorities.”

However, The Women’s Organisation, a social enterprise providing training, business support and guidance to women in business throughout the Liverpool and Manchester city regions, says the Chancellor’s package to help firms survive is seriously flawed.

Among the measures are one-off top-ups for retail, hospitality and leisure businesses forced to close based on their rateable values. They range from £4,000 for firms with a rateable value of £15,000 or under, £6,000 for firms with a rateable value of between £15,000-£51,000, and £9,000 for a rateable value of more than £51,000.

The cash is provided on a per-property basis and is expected to benefit more than 600,000 business properties, worth £4bn in total across all nations of the UK.

But, says The Women’s Organisation, not all employers pay their business rates directly to their local authority and it has called on the Government to invest more to ensure these companies, who collectively employ hundreds of thousands of staff, get equal support, pointing out that it costs significantly more to create new ventures once existing SMEs fail.

It also questions why companies that pay rates directly get more support than those who do not, in many cases paying business rates through their landlords.

Mr Sunak has also provided a £594m discretionary fund to support other impacted businesses, but, once again, this is not enough to provide sufficient support to all the businesses forced to close during the lockdown, which could last until Spring, said The Women’s Organisation.

Maggie O’Carroll, The Women’s Organisation co-founder and chief executive, said: “It is a difficult time for businesses and individuals across the country in light of renewed lockdown measures.

“Government support is crucial for businesses at this stage, and as such, we welcome the £4.6bn package of business support announced by the Chancellor.

“However, once again we are left with tens of thousands of businesses that will not receive any clear benefit from this package.

“The support requires immediate government attention to prevent more businesses falling through the gaps.”

She added: “The one-off top-up grant of up to £9,000 per property fails to account for businesses which do not pay rates directly to the local authority, eg, businesses who rent space in a larger building.

“In lieu of this, £594m has been made available for those who fall outside of this funding eligibility, which will be distributed through local authorities.

“Not only will this have to be rolled out at speed to have sufficient impact, but £594m is not enough to provide adequate support for the thousands of businesses forced to close due to lockdown.”

She said: “The Government needs to ensure that these businesses, which employ thousands of people, receive equal support to their counterparts who pay rates directly to the local authority.

“We call on the Government to invest more to save and sustain businesses and jobs as it will cost considerably more in the future to create new ones.

“Sustain our businesses now or pay later.”

 

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