South Scotland MSP Colin Smyth has called on the South of Scotland Enterprise Agency to establish a dedicated local fund to support businesses during the current Covid-19 crisis.
The local MSP has spoken to dozens of businesses across the south of Scotland who have been impacted by the pandemic but who are not eligible for any, or only very limited, financial support from the Scottish and UK Government funds.
The key issues raised have been:
· The Business Support Grants scheme has a cliff-edge in support for properties with a rateable value over £18,000, or £51,000 in the relevant sectors. Many businesses with a rateable value even slightly above the relevant threshold have been left with no support whatsoever, regardless of the impact Covid has had on their business.
· The Pivotal Enterprise Resilience Fund was the primary way in which businesses with higher rateable values can access support, however due to the broad criteria and the high level of demand, many businesses who could have benefitted from this scheme had their applications rejected, even where they were able to clearly demonstrate eligibility.
· Business Support Grants were, with limited exceptions, only available to businesses that pay Non-Domestic Rates. This meant businesses who do not pay rates, for a range of reasons, missed out on the scheme.
· The thresholds for £25,000 Business Support Grant was higher than England, meaning those in the relevant sectors with a rateable value between £15,000 and £18,000 received £15,000 less than they would have if they were based a few miles south of the border.
· The payment of Business Support Grants came at an early stage in the pandemic and for many, a grant of £10,000 will have been used up but the road to recovery will still be some way off.
· There has been no support available to freelancers who make the majority of their income from short-term PAYE contracts, rather than through typical self-employment.
· Self-employed people otherwise eligible for the Self-Employed Income Support Scheme with income above the threshold received no support whatsoever, in contrast to furloughed staff who received a capped amount.
· The eligibility criteria for the Newly Self-Employed Hardship Fund and the B&B Hardship Fund excluded anyone who had received Universal Credit, regardless of the amount of Universal Credit they received. This has excluded many of the people these schemes should have been designed to help.
In response to concerns, Colin Smyth has written to the Chief Executive of the South of Scotland Enterprise Agency, Nick Halfhide urging the Agency to set up a South of Scotland Business Hardship Fund.
Colin Smyth said: “The south of Scotland is facing massive economic uncertainty in the coming weeks and months.
“The decision not to extend the furlough scheme for sectors such as tourism and hospitality, and others that won’t need staff to fully return for some time, was a massive blow to this area.
“From the start of August, the furlough scheme begins to be reduced, and ultimately ended in October, which can only mean more redundancies for the area.
“The furlough scheme should have been extended for some sectors until next year but instead, we now see many companies who can’t afford to pay workers lay people off, adding to the already record high level of unemployment.
“Since the start of the pandemic I have been contacted by dozens of businesses who have fallen through the gaps in the various grant schemes that have been provided by the UK and Scottish Governments and many have lost out locally.
“That’s why I have written to the South of Scotland Enterprise Agency about the creation of a dedicated south of Scotland scheme to allow local flexibility in how that is allocated, and I’ll continue to put pressure on both the Scottish and UK Governments and their agencies to bring forward new grant schemes. The whole reason the Agency was set up was to provide local support tailored to local businesses, and that support will be more important now than ever.
“As we continue to fight to suppress this terrible virus, we must also do all we can to mitigate against the economic consequences.”