UK Government urged to fill gaps in funding schemes.
Economy Secretary Fiona Hyslop and Finance Secretary Kate Forbes have called on the UK Government to expand and accelerate the delivery of support for business during the coronavirus (COVID-19) outbreak.
The Scottish Government has welcomed today’s £1.25 billion COVID-19 package from the Treasury which focuses on high growth firms through a £500m Future Fund and £750m of grants and loans for SMEs focusing on research and development.
However, ministers have urged close collaboration with enterprise agencies in the delivery of the scheme to maximise take-up by Scotland’s brightest start-up prospects.
Writing to Chancellor Rishi Sunak, Ms Hyslop and Ms Forbes also called for the UK Government to look again at the effectiveness of the wider support they are offering.
Key asks of the Scottish Government include:
- An acceleration of the pace of issuing loans under the Coronavirus Business Interruption Scheme (CBILS) to ensure this support gets to where it is needed, as well as releasing take-up data to see how effectively the scheme is supporting businesses in Scotland.
- A call for the Job Retention Scheme to be more flexible to accommodate the variety of working patterns of employees and to provide further guidance to employers on which members of staff to furlough to ensure equity and transparency of those decisions.
- An immediate extension of the self-employed scheme to include those who have become self-employed since April 2019 and are currently ineligible for support. The Scottish Government is taking action to address the hardship faced by the newly self-employed.
Ms Hyslop said:
“I have previously raised the issue of supporting innovative new companies with UK Government Ministers and am therefore pleased to see that reflected in the Treasury’s announcement.
“However, from our wider discussions with business and other key partners, there is grave concern about the gaps in the provision of the UK Government schemes. More should be done for businesses and the newly self-employed facing immediate hardship and the prospect of collapse in communities across Scotland.
“I am asking the UK Government to take immediate action to accelerate the delivery of loans under the CBILS and provide better data on its take-up in Scotland. We have also raised concerns around the implementation of the Job Retention Scheme, including its flexibility and the impact on furloughed workers.
“The Scottish Government has already taken further steps to provide support for some of those ineligible for the previously announced schemes, including £220 million of funding. Some of this will support vulnerable but pivotal SMEs as well as looking to relieve the hardship of the recently self-employed ineligible for UK support. We are now calling on the UK Government to consider extending their funding to ease the cash flow crises for these businesses and protect productive capacity in the economy in Scotland.”
On 15 April the Scottish Government announced around £220 million of further grants for businesses, including the recently self-employed, to help them deal with the ongoing impact of the COVID-19 outbreak.
The package of measures includes £120 million to extend the Small Business Grant scheme to ensure that, in addition to a 100% grant on the first property, small business rate payers will be eligible to a 75% grant on all subsequent properties.
A further £100 million fund is also being made available to protect self-employed people and viable micro and SME businesses in distress due to COVID.