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Business support: Is £185m for coronavirus-hit firms ‘too little, too late’?

The Courier, News, Project Work - DO NOT USE WITHOUT TALKING TO MARK ASQUITH, Dundee City Centre during week 5 of lockdown due to coronavirus, covid-19 pandemic. Picture shows; shops and buisnesses are closed. Tuesday 21st April, 2020. Mhairi Edwards/DCT Media
The Courier, News, Project Work - DO NOT USE WITHOUT TALKING TO MARK ASQUITH, Dundee City Centre during week 5 of lockdown due to coronavirus, covid-19 pandemic. Picture shows; shops and buisnesses are closed. Tuesday 21st April, 2020. Mhairi Edwards/DCT Media

Businesses across Scotland struggling to cope with the coronavirus pandemic will be handed a lifeline in the new year as part of a £185 million package of targeted support announced by the Scottish Government.

The funding boost, made available as ministers set out how they will spend remaining cash passed on as a result of Covid-19 spending at Westminster, will benefit a range of businesses, including hairdressers, taxi firms, art venues and travel agents.

There will also be additional one-off payments in January of £2,000 or £3,000, depending on rateable value, to help hospitality businesses deal with the traditional post-Christmas dip in demand.

Specific support detailed in the announcement includes:

  • £15 million for the wedding sector and its supply chain, including photographers.
  • One-off grants totalling £15 million for mobile close-contact services, such as hairdressers.
  • A £19 million fund and one-off grants for taxi drivers.
  • £5 million for travel agents.
  • Almost £6 million for coach companies and tour operators.
  • £1.5 million for visitor attractions

Announcing the funding package at the Scottish Parliament on Wednesday, finance secretary Kate Forbes said support would be doled out on a “sector-by-sector basis so that it is appropriately targeted”.

Ms Forbes confirmed she had also written to the UK Treasury, calling for Scotland to receive its share of rates relief reimbursed by supermarkets “to ensure this is spent on those areas hardest hit as part of Scotland’s recovery from Covid-19”.

business support
Finance Secretary Kate Forbes.

She said: “We have listened to businesses and this assistance will be provided on a sector-by-sector basis, targeted at those who need it most.

“We are developing grant schemes for hospitality, for the events sector, live music and cultural venues, for the arts, indoor football centres and for the food and drink sector, including £1.8 million for brewers.

“We will give £1.5 million to travelling show people ineligible for other support, while a new £19 million fund, plus a one-off grant, will help taxi drivers.

business support

“I can also announce that further support of £60 million will be provided to the tourism sector, details of which will be developed in consultation with the industry.

“I am listening to the needs of business and we will continue to review and refine our Covid-19 support offer within the available resources.”

Further details of the support package are expected to be announced in the coming days and businesses will be able to apply for the new grant schemes in January.

Splashing the cash

The Scottish Government has received a total of £8.2 billion from Westminster as a result of pandemic spending but £6 billion had previously been unallocated.

Ms Forbes said the remaining £2.2 billion would also be used to cover £600 million in health and social care costs and welfare support, including vaccines, test and trace systems, and to pay for the £500 bonuses for health and social care workers.

business support
Union Street in Aberdeen during lockdown.

A further £570 million has been allocated to help businesses impacted by the Scottish Government’s tiered framework by funding support packages and self-employed hardship funds.

Around £500 million will support transport services and cover pandemic-related income shortfalls in organisations such as Police Scotland, the Scottish Funding Council and the Scottish Courts and Tribunal Services.

Previously announced funding to allow local authorities to provide discretionary cash to struggling businesses has also been included in the £2.2 billion allocation.

business support
Elgin in Moray.

Ms Forbes confirmed £300 million of the previously unallocated funds will be held back as a “contingency” in case of unplanned pressures in the new year.

She said: “The nature of the Covid-19 outbreak and the potential asks for further demand-led spend means it’s crucial that this funding is held as contingency.

“We must also consider any further funding requirements relating to the end of the EU transition period on December 31, with costs wholly dependent on the final deal negotiated by the UK Government.”

‘Too little, too late’

The Scottish Conservatives welcomed the funding but warned that with the finer details of the schemes still unclear and businesses unable to apply until January, the announcement will likely be “too little, too late” for some firms.

The party also brought forward a motion at Parliament, calling for a review of business grants to ensure support needed over winter is available.

Murdo Fraser MSP.

Tory finance spokesman Murdo Fraser said: “Businesses have their backs up against the wall and need access to the additional grants right now – they can’t wait until January with countless jobs and livelihoods on the line.

“Pubs, restaurants, taxis and dozens of other types of business would normally be enjoying one of their best times of year just now. Instead they are facing devastating restrictions and fighting to stay afloat.”

Scottish Labour deputy leader and finance spokeswoman Jackie Baillie also welcomed the funding announcement but said many businesses had received “no help” from existing crisis funds because the criteria are too tight.

She added: “Most supply chain businesses have been excluded and those without premises have been excluded, too, so I welcome the flexibility on criteria.”

‘Ministers have seen the light’

Andrew McRae, the Scotland policy chairman for the Federation of Small Businesses, said: “These new funds should close some of the most yawning gaps in coronavirus business support and help many Scottish smaller firms who were forgotten during previous initiatives.

“While we’d like to have seen a speedier and more systematic approach to supporting local businesses crushed by the crisis, we’re pleased that ministers have seen the light following our representations.”

Mr McRae also reiterated his group’s call for a retail voucher to be sent to every home in Scotland after the pandemic to “inject real spending power” into local economies.

Scottish Tourism Alliance chairman Marc Crothall said businesses “very much welcomed” the commitment but pushed for details to be released “within the next few days”.

He said: “Despite the announcement of a total package of support, I know there will be widespread disappointment and frustration from many across the industry that the detail on what level of funding businesses can expect to receive, how these funds will be distributed and when was not made clear in today’s statement.”

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