Inverclyde Firms Seek Guidance as Government Support Schemes Take Effect
ICC Phase 4 Findings
Inverclyde businesses hit by the Covid-19 lockdown could be ready to hit the ground running once they are provided clear guidance from the Scottish Government on returning to work, according to a new survey by Inverclyde Chamber of Commerce.
The poll, which ran from 6-15 May 2020, shows that while the vast majority of businesses in Inverclyde continue to fear for their survival, there are signs companies are benefitting from access to a range of government support schemes.
Nearly two-thirds of businesses (62%) surveyed said they would need a week or less to get back up and running under a partial or complete end of the lockdown. However, the vast majority (76%) said they would need clear advice and guidance from the Government to make a recovery.
This need outstripped calls for further financial support, which was still deemed necessary by 60% of respondents. Up to 89% of businesses have said the loss of income is their chief risk to survival while a further 69% cite declines in cash flow as their most significant threat.
More worryingly for Inverclyde residents is 35% of businesses surveyed are concerned by the potential redundancies within the workforce that could materialise.
Nearly one in four businesses (23%) said they face imminent collapse in the next two months while 42% fear they will not be able to survive if lockdown conditions persist.
These figures represent a small decrease in risk compared to previous survey data which found that catastrophic declines in income and cash caused by lockdown conditions meant almost half (48%) of companies faced collapse in the upcoming quarter.
Gavin McDonagh, ICC President, said:
“Inverclyde’s businesses are bruised, and it is still the case some are likely to fail. But those that are ready and able to get back to work are showing some signs of confidence they could make it through.
“What is clearly needed now is guidance, specific to sectors, on how to return to work in a way that is safe for employees, customers and the wider population.
“This survey shows that support from the range of schemes launched by both the Scottish and UK Governments are having an impact. As well as a need for guidelines, there is still a demand for continued support to ensure that businesses lead us out of this economic collapse.
“Direct support to ensure employment doesn’t collapse is essential, but the Government should also focus on areas such as infrastructure investment, childcare and skills development as a means of supporting business in the recovery period.
“The biggest concern is the feedback regarding the possibility of mass-redundancies, and therefore the Chamber implores any businesses requiring support to get in touch with us.”
The survey showed that the Coronavirus Job Retention Scheme, the Business Support Grant, and the VAT Deferral Scheme were by far the most used schemes with 50% of businesses in Inverclyde surveyed having accessed these.
Mr McDonagh added:
“Recent moves to extend the popular furlough scheme were welcome, but there are still concerns for businesses, particularly those in manufacturing or those reliant on tourism, whether the extension is enough.
“There’s still the risk the scheme will run out before businesses have enough income to pay staff.
“Another concern is the VAT deferral scheme being utilised by businesses in the short-term, which begins to stack debt and cash flow problems for later months should the economy not return to some kind of pre-Covid19 levels.”
The latest Quarterly Economic Indicator survey has been released by Scottish Chambers of Commerce, in conjunction with Strathclyde University’s Fraser of Allander Institute, and Inverclyde Chamber is inviting all businesses to complete this short five-minute survey:
23% of firms are not confident that their business will survive the crisis if there are further prolonged lockdown periods and sustained social distancing measures.
However, just over half (73%) are confident that they would survive even in the same scenario.
CONCERNS IF THE CURRENT LOCKDOWN IS PROLONGED OVER THE NEXT TWO MONTHS:
The chief concern is lost income, with 89% of businesses highlighting this as a potential risk.
69% indicated cash flow as such as concern in this scenario.
35% highlighted a loss in the workforce as a concern.
TIME NEEDED TO COME OUT OF LOCKDOWN:
62% of responses indicated that they would only need less than a week if a date for the lifting or partial lifting of some lockdown measures were put in place by the Scottish Government.
23% have responded saying that they would need 1-3 weeks.
35% said that they would need no time at all.
LIFE AFTER COVID-19:
Almost half (39%) are saying that they will need to adapt their business to a post-COVID-19 environment, 19% are saying that they are only discussing how to adjust at this stage potentially, and 23% see opportunity in a post-COVID-19 world
54% of firms are planning to make some changes to their business models for post-COVID-19, 27% say that their models will probably stay similar as they were before.
ACTIONS NEEDED BY GOVERNMENT TO SUPPORT AN ECONOMIC RECOVERY:
The highest trend here was that 76% of responses emphasised the need for clear advice and guidance going forward.
Three-fifths (60%) pinpointed a need for further direct financial support.
44% of responses have also indicated that they feel a need for contingency plans for potential further lockdown periods.
Over half (52%) highlighted a need for a further reduction in the cost of doing business, with an additional 48% calling for other economic stimulus measures to be put into place to get the economy restarted.
WHAT GOVERNMENT SUPPORT MEASURES HAVE BEEN USED SO FAR:
Half of the responses (50%) have used the Treasury furlough scheme to support their business through this crisis.
50% of firms have also used the Scottish Government business support grant fund, with 15% taking advantage of business rates relief.
50% have utilised the deferring of VAT by HMRC, 31% have used HMRC Time to Pay.
4% have used the new Bounce Back Loans scheme recently offered by the UK Government, with no firms having used the Coronavirus Business Interruption Loan Scheme.
Only 4% have managed to use the new Scottish Government Pivotal Enterprise Resilience Fund.