Business support landscape still a mixed picture, say small firms

  • 02 Nov 2020

Following the Prime Minister's announcement of a further lockdown in England, and the announcement of fresh business support measures by the UK Government, Federation of Small Businesses (FSB) National Chairman Mike Cherry, called for more to be done.

Mr Cherry said: “These are very tough times for our members, who are working so hard to keep their businesses going. They have invested time and money to follow the guidelines and make their businesses COVID-secure, yet now we see many dealing with a second shut-down.

 

“Small firms must be properly supported through this ongoing crisis. While it’s been encouraging to see the Prime Minister listening to some of our calls for extra support, it is still not enough.

“The fact that small business confidence was so low even before the more recent tightening of restrictions in many parts of the UK shows the scale of the challenge to get small firms through this crisis and out the other side so they can drive the economic recovery.

“The uprating of the Self-Employment Income Support Scheme to 80% for November is generous but many are still not included in the initiative. The likes of company directors and the newly self-employed have disgracefully been deemed ineligible for support.

“The extension of the furlough scheme across the UK until the end of November is welcome, but the government must remain open to a possible further extension where significant COVID restrictions remain in place.

 

“In terms of the new restrictions affecting England, the government should look at making the cash grants on offer more generous, to match those of the original lockdown. The impact along supply chains of the worst-affected sectors should also be better recognised. And there should be 100% Business Rates relief for smaller businesses.”

Last week the FSB released it's latest Small Business Index survey, which showed confidence has been in negative territory since July 2018.

The Q3 UK SBI confidence figure stands at -32.6, down 28 points on last quarter. Only a third (34%) of those surveyed at the end of last month expect their performance to improve over the coming three months. The significant majority (66%) expect performance to worsen.

A record one in four (25%) small firms say they have reduced headcounts last quarter. An even higher proportion (29%) expect to make redundancies over the coming three months – one in ten (12%) expect to let at least a quarter of their staff go.

 

Covid-linked disruption has caused revenue growth to fall to its lowest recorded ebb, with more than half (56%) of those surveyed reporting a drop. A similar share (50%) expect revenues to fall next quarter.  

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