Is the government’s COVID business support package enough?
December 2021 – Hastings Observer column
So, it’s Christmas Eve 2021, and as things stand it’s hard to predict just what the UK will be doing with regards to COVID when this column goes to print in a week or two’s time.
What new restrictions (if any) will be in place?
Will Omicron cases still be on the rise, or will we be over the peak?
And, from a business perspective, how will our shops, salons, pubs, cafes, and restaurants be doing as they count the cost of second lean year at what should have been their busiest time?
Hospitality and leisure businesses will soon be receiving small grants of between just under £3k and up to £6k depending upon their rateable value.
This can’t hurt, but in real terms for many it will just about cover a month’s rent and other fixed outgoings – and for some it won’t even do that.
Next up will be the rather quietly introduced ‘COVID-19 Additional Relief Fund’ – which was first announced way back in March, but the government have only just made allocations to local authorities and issued guidance on how it can be spent.
In a nutshell it will provide Hastings with £1.5m in rebates on business rates payments to businesses that haven’t so far had the benefit of zero-rating.
The key thing in the guidance is an encouragement to target the money at those business sectors that have been worst hit by COVID.
Measured by reductions in ‘GVA’ (Gross Value Added) the hospitality sector has been worst hit with a 55% downturn at last count – but as these businesses are already benefiting from full rate relief they won’t see any of these funds coming their way, as neither will most of the arts and entertainment industry, despite their GVA falling by a third.
The next hardest-hit sector is defined in the regulations as ‘Other’ – but this essentially covers hairdressers and beauty salons, plus funeral services. Grouped together these businesses have seen a 32% drop in their GVA numbers – and it would seem highly likely that these will be relatively high on the priority list.
Of course, the relatively small size of these types of business and their locations means that in cash terms the benefits won’t be great – a fairly large salon in the Old Town for instance has a rates bill of just under £300 per month, so even if a 100% rebate is offered that may still be only around £3,500 for the whole year.
Love Hastings is already in discussions with the council to try and get a fair deal for those who need it – including the education sector, fishing, construction, and manufacturing.
But in the longer term it feels as if the government needs to look for further ways to reduce business costs, through extending and expanding temporary changes to VAT, looking at further grants to support businesses and freelancers outside of the rating system, and extending the rates freeze for retail and hospitality for the immediate future.