Monday, September 28, 2020

Summer Statement schemes fall short in protecting firms – BCC Coronavirus Business Impact Tracker

Results from the latest BCC Coronavirus Business Impact Tracker reveal that businesses are still facing significant cashflow challenges with the schemes announced in the Summer Statement failing to provide support at the scale needed to protect jobs after the furlough scheme winds down.

The business organisation’s tracker survey serves as a barometer of the pandemic’s impact on businesses and the effectiveness of government support measures.

Business conditions

Firms reporting an increase in UK sales remained static at 34%, 42% reported a slight or significant decrease. Just over half (55%) reported a slight or significant decrease in their cashflow compared to last month.

A minority, 21% of firms, said that their cashflow position had improved. Of these, 64% said new customer demand was the driver of this. 35% cited the government furlough scheme, and another 24% and 25% respectively said loan and grant schemes had helped improve their cashflow position, demonstrating that many firms are still relying on government support schemes.

Summer Statement support

This week’s Tracker contains the first comprehensive survey of business sentiment on the Chancellor’s Summer Statement announcements of 8 July.

43% of firms intend to access the Job Retention Bonus, which will award £1,000 to firms who retain furloughed staff until January. A further 40% will not use the scheme. Figures from the BCC’s latest Quarterly Recruitment Outlook found that almost a third of firms (29%) expect to decrease the size of their workforce in the next three months.

Elsewhere both awareness and expected usage were low. 56% of businesses said they did not intend to use the Kickstart scheme, a further 31% said they had not heard of the scheme and 8% said they would like to use it but are ineligible. 62% of firms said they did not intend to use grants for employers who take on trainees and 65% of firms said they did not intend to access grants for those who hire apprentices. Previous BCC research has shown that just 12% of firms are planning to recruit staff this quarter.

20% of respondents said they would like to make use of the targeted VAT cut for certain businesses but that they were ineligible, indicating that some businesses think the scope of the scheme is too narrow.

Reducing the cost of employment

BCC continues to call on government to reduce the overall cost burden on firms to protect business and preserve as many jobs as possible in the coming months. The business organisation has called for an 18-month expansion of the Employment Allowance from £4,000 to £20,000 and an increase to the threshold for National Insurance contributions from £8,788 to £12,500. The latter could save businesses around £500 per job.

Commenting on the findings, BCC Co-Executive Director Claire Walker said: “Business communities continue to face significant operational challenges, with a prolonged period of reduced sales and cashflow meaning many firms are showing signs of distress.

“Expected usage of schemes announced in the Summer Statement is relatively low, indicating they do not provide the right kind of support for many businesses at this critical time and a rethink is needed.

“With confidence and demand not returning at the scale firms need, the government must take radical steps to slash the tax burden around employment to help companies pay valued staff. A major boost to the Employment Allowance, and an increase in the threshold for employers’ National Insurance contributions are needed now if he wants to help viable companies save jobs as the furlough scheme comes to an end.”

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 lockdown having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.






Latest news

20 years in the making – Serena Humphrey launches ‘The F Word Academy’

One of the region’s most respected business figures, Serena Humphrey, has celebrated two decades in business and more than 30 years in the financial...

East Midlands Bricks Awards 2020 goes fully digital

East Midlands Business Link is pleased to announce that despite Governmental guidelines making in-person conference and events of the size of the Bricks Awards...

University to create Smart Wireless Innovation Facility as part of ‘smart campus’ project

Nottingham Trent University’s Clifton Campus will see the implementation of new 5G connectivity and infrastructure as part of a new ‘smart campus’ project. As well...

Time Out: Ashley Oates, Head of Sustainability at Ward

The weekend has crept up on us once again. That means it’s time for some quickfire questions with another business leader from our region. For...

Commissions calls for £4.2bn annual skills investment to combat COVID, reboot economy

The Future-Ready Skills Commission is calling for £4.2 billion of skills investment a year to reboot the economy and help the UK recover from...

Related news

Haulage, storage and distribution firm secures 55,000 sq ft unit at St. Modwen Park Lincoln

St. Modwen will have another new occupier at St. Modwen Park Lincoln after haulage, storage and distribution firm George H Kime & Co Ltd...

20 years in the making – Serena Humphrey launches ‘The F Word Academy’

One of the region’s most respected business figures, Serena Humphrey, has celebrated two decades in business and more than 30 years in the financial...

East Midlands Bricks Awards 2020 goes fully digital

East Midlands Business Link is pleased to announce that despite Governmental guidelines making in-person conference and events of the size of the Bricks Awards...

University to create Smart Wireless Innovation Facility as part of ‘smart campus’ project

Nottingham Trent University’s Clifton Campus will see the implementation of new 5G connectivity and infrastructure as part of a new ‘smart campus’ project. As well...

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close