Analysis: Does the Chancellor's £375m boost for Scottish firms go far enough?
Scotland has been granted an extra £375 million to help firms withstand the latest lockdown – but there are fears that it will not stop firms going to the wall.
Chancellor Rishi Sunak announced the new financial package yesterday morning, which will see businesses in retail, hospitality and leisure given one-off grants worth up to £9,000 as part of a package worth £4 billion across the UK – in a bid to sustain jobs.
However, the £375m boost north of the Border has been contested by Scottish Finance Secretary Kate Forbes, who says the funding to deal with lockdown is “not new”.
The news comes hot on the heels of new lockdown measures – with Scottish retailers saying they have been “thwacked hard” by the move.
Professor Graeme Roy, director of the Fraser of Allander Institute at the University of Strathclyde, said further restriction of day-to-day activities for the next few weeks was the best way to protect the economy in the long run – but he deemed the return to a near national lockdown as a “bitter blow” for many businesses.
He welcomed the news of the £375m of grant support and expects the Scottish Government to also prioritise support for retail, hospitality and leisure companies.
Ensuring the quick flow of support to the businesses in urgent need of cashflow is crucial, Prof Roy said, “but even then, many businesses who will be impacted by these new restrictions, including those with parents now forced to care for their children with schools and nurseries closed, are not going to receive any additional support”.
“The consequence is likely to mean more businesses going to the wall and a deepening of the economic crisis,” he said.
Also highlighting reservations regarding the new financial support package is Dr Liz Cameron, chief executive of Scottish Chambers of Commerce. She agreed the additional business support from HM Treasury was “needed” and welcome.
“However, it does not go far enough to mitigate the costs of shutting down our businesses,” she said.
"At a time when employees are anxious about their jobs and business owners are struggling to plan ahead, with cash running out, we ask that the Scottish Government allocate every penny of this additional funding to supporting businesses and saving our jobs.
“Billions have already been spent helping millions of businesses – we cannot allow businesses to fail at what we all hope will be our last hurdle."
Also calling for the £375m to be used as effectively as possible is Mhairi Taylor, the restauranteur behind neighbourhood restaurant Zique’s and Bakery by Zique, both in Glasgow’s West End, who said: “This funding is very welcome. Our main focus right now is to keep our staff on and this will help us do that. There is no other option – businesses that are forced to close must be supported.
“The challenge will be to distribute this funding both quickly and fairly. Every business has different costs and faces different challenges. The only way to truly understand this is to truly listen to business owners.”
Andrew McRae, Scotland policy chair for the Federation of Small Businesses (FSB), said the sum “should be split between cash grants for smaller property-based firms, and extra help for non-premises based operators that have had little or no help so far”.
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