Emergency funding to help Scots firms hit the latest lockdown “does not come close” to the support they need to survive enforced closures in level four, industry leaders have warned.
There are growing concerns that many businesses and livelihoods will be “destroyed” after non-essential shops, pubs, restaurants and cafes, along with traders like hairdressers and beauticians, were forced to closed down again on Friday in 11 areas of Scotland.
Ministers are now facing calls for a more strategic approach to targeting economic support – although the limited funding pot means there is unlikely to be enough to go round.
High street shops and hospitality have been hit particularly hard by the lockdown, which comes in the build-up to the vital Christmas period.
Dr Liz Cameron, chief executive of Scottish Chambers of Commerce, said: “Government support during the pandemic has been let out in dribbles when it needs a constant flow. A more strategic approach to stimulus is required, including a business rates holiday across Scotland and extra support for the supply chain across the impacted sectors.
“Ideally the best support is allowing business to trade, and when they are finally allowed to there will likely be a strong surge in pent up demand.
“However, without support or similar there will be businesses and livelihoods destroyed before they can get there.”
Marc Crothall, chief executive of the Scottish Tourism Alliance, warned last week that many hotels were now deciding to close their doors until well into the new year, as visitors numbers were depleted as a result of the travel ban, as well as the ban on serving alcohol.
He said the basic grants of £3,000 every four weeks for most medium-sized firms forced to close was “way short” of compensating them for the level of fixed overheads which firms will incur.
“Typically a pub when it’s closed still has an overhead of about £10,000 a month,” he said.
Average costs for a hotel – although this can very depending on size and location – is likely to be closer to £60,000.”
Mr Crothall added: “Where we are with the Scottish Government is that there’s a full appreciation of that.
“There is currently work underway to try to design an additional support package for not just hotels or pubs, but looking across all the sectors where some supplementary payment can be made available through grants to help ease that gap.
“But also there’s only so much to go around and there are businesses that are without.”
The impact is just as bad in lower tiers, such as level one and two, which may be allowed to stay open and don’t qualify for support – but have lost their customer base as a result of the travel ban.
Mr Crothall said First Minister Nicola Sturgeon was sympathetic to industry needs in a meeting last week.
But he added: “The bottom line is, and I think it’s reality, that there isn’t sufficient funds to support everybody, so trying to get that balance right of what will need to be support for at least four to five months still is going to be really tough.”
The pub industry is bearing the brunt of restrictions. Even before the the current level four restrictions came into force across large swathes of the Central Belt, including Glasgow, it has been more than a month since they were allowed to serve alcohol in these areas.
A spokesman for the Scottish Beer & Pub Association said: “Pubs have been absolutely crippled by the curfew and restrictions on the sale of alcohol.
“The economic support across the levels doesn’t come close to compensating businesses whose fixed costs, even when closed, dwarf the grants on offer.”
The spokesman said there was also consternation on the part of many in the industry about the Tied Pubs Bill, which was being debated in Parliament this week amid concerns it will add “further uncertainty and pressure at the worst possible time”.
He added:” MSPs need to back pubs by rejecting it on Thursday.”
Andrew McRae, FSB’s Scotland policy chair, said independent shops and other businesses on Scotland’s high street have had a “particularly raw deal”.
“I understand that policymakers have had to make difficult choices,” he said.
“But we’d highlight that there’s a sense on the ground that the economic impact of this pandemic has not been distributed equitably, and smaller firms have been asked to take more than their fair share.”
The FSB is now calling on the Scottish Government and councils to work together to ensure that a new £30 million fund announced on Tuesday reaches the right businesses and quickly.
He said: “No more excuses are acceptable for administrative delays. While some local flexibility will be required, there are obvious groups of people – like hospitality and retail suppliers – that require support that should get it no matter where they live.”
Mr McRae added: “Governments in London and Edinburgh have both acknowledged that there’s insufficient support available to compensate all businesses.
“That’s why ministers must prioritise those firms hit hardest by the restrictions and those operators that have received little or nothing so far, not the biggest firms who have been able to trade largely as normal.”
Ms Sturgeon told MSPs on Thursday that discretionary funding being made available in Scotland goes “further” than south of the Border and councils are seeking to get that support to firms “as quickly as possible”.
“Government has a big responsibility to ensure that we support businesses,” she said.
“But nothing that we can do will absolutely compensate business for every single loss that is made. That is true in Scotland, England, Wales and Northern Ireland and across the world. The most important thing that we can do for business is to get and keep the virus down, so that we can open not just the economy but society more, and do that sustainably.”