News / Business West
Support for businesses ‘grossly inadequate’ during second lockdown
Businesses have reported government support during the second lockdown failed to cover a quarter of their basic costs, putting jobs and survival on the line.
The latest survey by Business West has revealed the grants available for firms unable to open throughout November was “grossly inadequate” amid warnings economic confidence is waning across the South West.
It found 54 per cent of businesses in the region affected by lockdown measures, including restaurants, cafes and non-essential retailers, reported the financial support available failed to cover a quarter of their most basic costs.
Respondents also slammed the dwindling scope and amount of money available from the government and last-minute decision to extend the furlough scheme, with one business owner saying: “people have been made redundant based on following government guidance that was subsequently reversed”.
Phil Smith, the managing director at Business West said now is not the time for the government to skimp on support for businesses.
“A total of 497 businesses of all sizes and sectors across the region took this survey and the trends are clear – the second national lockdown has deepened the business community’s declining confidence in the economy overall and in their business performance,” said Smith.
“Weak demand and the general economic uncertainty present an extremely difficult environment for businesses to operate and prosper. The economic expectations of the UK economy for the next 12 months are negative for a majority (60 per cent) of businesses, with only 15 per cent report being confident.
“Looking forward to 2021, businesses will look to government, both local and national, to deliver a more stable, predictable and commerce friendly environment to support economic recovery. Many businesses will be looking forward to the end of the year hoping 2021 brings a more hospitable outlook.”
The survey, which ran between November 5 and 27, revealed twice as many businesses had a negative outlook for the UK economy in the final quarter of 2020 compared to the same period in 2019, fueled by concerns about general economic conditions and Brexit worries.
It also found more than a third of businesses across the region cut their investment in new plant, research & development, staff training and expansion into new commercial property in the three months to November, while half reported a further decline in their cash flows from the previous quarter.
Turnover and profitability have generally fallen and more than 70 per cent of the survey respondents said they were operating below capacity.
Key economic indicators – from Business West survey December 2020
Commenting on the lack of government support, Smith added: “The financial support from grants to closed or badly hit businesses is currently far less generous than earlier on in the pandemic. Government may think that these businesses are well catered for, but our polling shows that many are hurting badly.
“As mass vaccinations get underway, now is not the time to skimp on support for local businesses unable to operate normally.
“Clearly there is a need for government to balance its books and 2021 will undoubtedly see some tough choices being made. However, with an effective vaccine finally in our grasp, government needs to heed its own general message to the public and hang on in there just a little while longer and continue to support businesses into the spring.”
Main photo by Lowie Trevena
Read more: Businesses remain in the dark as Brexit negotiations stumble on
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