Call to protect Scots firms facing 'catastrophic' drop in cashflow
A snap survey of about 350 companies in Scotland – a third of whom are from the retail, hospitality or tourism sectors – has been undertaken by the Scottish Chambers of Commerce (SCC).
A total of 96 per cent of the firms surveyed have fewer than 250 employees. The study found that without access to support, nearly half expect to run out of cash in three months’ time, which is how long stringent measures to mitigate the spread of the virus are expected to be in place. Of these, 13 per cent say they have less than a month before cash runs out.
As for government support, 46 per cent of respondents are using the Job Retention Scheme, and about a fifth plan to use it. Additionally, almost half are using the small business grant of £10,000 or plan to use it, and 8 per cent have been unsuccessful in applying for it.
Nearly two-thirds of firms believe there are gaps in the current business support measures offered by government. The main shortfalls cited included a lack of accessibility to the Coronavirus Business Interruption Loan Scheme, with many anxious about banks not paying fast enough and at unattractive rates for their business.
Additionally, half have already furloughed – or intend to – furlough at least half of their workforce, and a fifth aim to furlough them all.
SCC chief executive Liz Cameron said: “Both the UK and Scottish Government have moved quickly to staunch this catastrophic decline, but what businesses are saying is it’s still not enough.
“If we are to prevent the Scottish economy from being damaged beyond recognition, businesses need cash in the bank now to be fit for when the country is able to start returning to day-to-day activities.
“Businesses are also looking for an economic recovery plan in Scotland that avoids a restart-stop scenario”
She also called for clarity to enable planning while protecting people’s health. “Many are also concerned that Scotland’s recovery schedule doesn’t lag too far behind that in England, with the potential of creating a competitive disadvantage in Scotland.
“As we begin to look towards what the economic recovery phase will look like and what it will mean for businesses and jobs across the country, we must always remember the economy is about the people within it who will power us out of this crisis. Businesses are playing their part in saving lives and protecting the NHS, but we must also secure the economic future of our country and the livelihoods of those who work within it.”
Meanwhile, the Office for National Statistics said two-thirds of UK businesses have applied for government help paying wage bills for furloughed staff, but less than a fifth have received it so far.
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