Businesses in retail, hospitality and leisure will receive new grants to help them keep afloat until spring
As the UK enters its third lockdown, businesses are now struggling to stay afloat after being forced to shut down amid a spiralling number of COVID-19 cases. The government has now implemented a series of new measures to support struggling firms during this crucial period. Chancellor Rishi Sunak has announced a new £4.6 billion package for businesses in retail, hospitality and leisure to keep them afloat until spring.
On Monday evening, Prime Minister Boris Johnson announced a nationwide lockdown with businesses ordered to close until at least mid-February in order to combat the spread of coronavirus. Following yesterday’s announcement, the Chancellor has declared new lockdown grants to support firms and protect jobs during the country’s third national lockdown. Businesses in retail, hospitality and leisure will be offered one-off top up grants worth up to £9000 per property to help them stay afloat until Spring.
The chancellor also pledged a further £594 million for local authorities and devolved administrations to support businesses not eligible for the grants. The Scottish Government will receive £375m, the Welsh Government £227m and the Northern Ireland Executive £127m. Businesses do not have to pay the grand money back. The help is in addition to business rates relief and the furlough scheme, which has been extended until the end of April.
The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further, Chancellor Rishi Sunak said. 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.
Mr Sunak said he will consider whether or how to extend support packages in its Budget on March 3.”The Budget early in March is an excellent opportunity to take stock of the range of support we have put in place and set out the next stage of our economic response,” he said. Businesses have declared their support for the new grant package, which will provide necessary aid to firms who are struggling to stay afloat during this difficult period.
Due to the pandemic, 60% of SMEs across Europe have had their cashflow impacted negatively, Scott Donnelly, CEO, CapitalBox said. They have been unable to pay wages, to reinvest in their businesses to survive and haven’t been able to cover off outstanding debts. We welcome today’s news of the UK government making new grants available to businesses during this next phase of the pandemic. The additional support is critical as many businesses will struggle to rebuild over the next few months ‘ especially SMEs. Our recent survey shows 56% of UK businesses have had to take out a government loan during the COVID-19 period, and 65% have needed to furlough staff. In an effort to reduce redundancies, which included 42% of companies in 2020, governments must learn from the initial phases of lending schemes and work closely with the finance sector to ensure SMEs have access to the necessary funding.
However, some business leaders have urged the government to provide more help to firms once the lockdown is lifted, as many companies will struggle to recover and rebuild operations after being forced to close for a third time during the height of the pandemic. Data from hundreds of thousands of our UK customers has shown us just how deeply small business revenues have been impacted by the pandemic, Damon Anderson, Director of Operations, Xero said. In the first lockdown small business revenue fell to -23% YoY and then -7.9% YoY during November’s lockdown. While the impact of the second lockdown was smaller, it’s indisputable that the impact of the third will be a huge blow to small businesses across the country. While businesses have been resilient in finding new ways to adapt, operate and retain customers, continued restrictions after a challenging year suggest the third lockdown will be the hardest yet and we risk seeing sales declines similar to those seen last Spring. Many of the government’s various support packages come to end by April, so now is the time to be thinking about what happens next to give businesses the chance to recover and rebuild.
Businesses are now grappling to stay afloat as the UK enters yet another national lockdown, meaning thousands of firms across the country are left struggling to make ends meet as they are forced to close their doors once again. It is essential the government lend crucial support to businesses to prevent them from collapsing, to save jobs and protect people’s livelihoods. England’s lockdown rules are set to be reviewed on 15 February while Scotland’s will be reviewed at the end of January.