More emergency Covid funding but no lockdown exit plan yet

Tuesday, 16 February 2021

The Scottish Government has confirmed how it will use some of the extra money it has received from the UK Government to support businesses while they remain closed but has given no indicative timetable when those businesses might be able to re-open or even the criteria or conditions that will trigger a resumption of trading.  The First Minister has told the Scottish Parliament she hopes to release a revised strategic framework next week, when the Prime Minister is also due to publish a route map out of lockdown for England.  She also confirmed that the phased return of pupils to school will commence on 22nd February, with 15th March set as the earliest possible date when further pupils could return.  The hospitality sector was offered no respite though, with hopes of being able to welcome back even limited numbers of guests at Easter quashed by the First Minister’s statement.

Scotland has received an additional £1.1bn in Barnett consequential funding from the UK Government and the retail, leisure, hospitality and aviation sectors will be the main business beneficiaries, with 100% Business Rates Relief in those sectors extended until April 2022.  

The Scottish Government has also announced that the Newly Self Employed Hardship Fund has reopened for applications and eligible recipients will receive a grant of £4000.   This is a potentially business-saving lifeline for the many self-employed people who are not eligible for the UK Government scheme,   Click here for eligibility and to apply.

Commenting on the first Minister’s announcement to the Scottish Parliament yesterday and the additional business support funding, Alan Mitchell, Chief Executive of Fife Chamber of Commerce, said: “Once again we are left welcoming additional financial support for some of the businesses devastated by trading restrictions but frustrated that the Scottish Government is providing no clarity on when the economy will start to re-open and businesses can resume or expand trading.   We are, however, pleased that she hopes to issue a revised Strategic Framework next week, which will set out the order in which different parts of the economy will re-open and the conditions that will need to be met to allow it.  This is what Fife Chamber and its partners in the Scottish Chambers of Commerce network have been strongly advocating for some time now.

“Even if all businesses were receiving adequate levels of financial compensation, which they are patently not, the drip-feeding of grants and loans to businesses to keep them afloat will never be an adequate substitute for a clear economic recovery plan, a re-opening timetable and actually being able to trade.  That is what will rebuild company profits and allow them to hold onto their staff and hire new employees.  In the absence of guidance or indicative timelines, companies cannot plan investment, hiring or training.  Economic recovery will be much slower.  It will take longer for people who have lost their job to find a new one.   Policies to suppress Covid have already caused substantial health harm.  Widespread business closures and job losses will significantly worsen this as we lose the taxes from businesses and the people they employ that underpin our public services and our communities.  

“The Scottish Government is not going to suddenly change its policy and give the health of the economy precedence over the prevalence of Covid but it can and should tell us what Covid health metrics – deaths, hospitalisation rates, proportion of population etc – will trigger the easing of restrictions and tell us when it hopes these metrics will be sufficiently positive to allow policy changes.  Then at least businesses can look ahead with optimism and try to plan for growth rather than live with fear and uncertainty and simply try to survive and hope that they are lucky enough to benefit from the next Government support package that is announced.”