“Very little evidence” SNP have paid a penny of £185m to businesses

The Scottish Conservatives have said there is “very little evidence” that the SNP Government has delivered vital funds to businesses that they promised a month ago.  

None of the £185 million business support promised in early December appears to have reached businesses, with the Scottish Government giving no indication that the funds are even live.

On Good Morning Scotland, SNP Minister Fiona Hyslop was unable to say how the extra £8.6 billion from the UK Government to fight the pandemic has been spent. She was repeatedly asked how much had been paid to business and could not give any indication that businesses had received funds yet.

The last available figures, published just before Christmas, also indicate that only a fifth of another key fund has been paid out. Just £6 million of the £30 million had reached businesses, according to the Scottish Government’s own figures.

The Federation of Small Businesses Scotland say the SNP’s business funding is stuck in an “administrative logjam preventing money reaching businesses”.

There is also still another £700 million from the UK Government that the SNP have not allocated.

Scottish Conservative leader Douglas Ross said: “Businesses are struggling for survival and there’s very little evidence any funding is reaching them from the SNP.

“SNP minister Fiona Hyslop hopelessly struggled to answer where they’ve spent UK Government funding and how much of it has gone to businesses.

“More money is just sitting there – around £700 million is still to be used from the UK Government - but it seems to be trapped in the SNP’s vaults.

“We’ve seen this before from the SNP. They hide how much is actually going to businesses in a fog of different funds. In the end, their Scottish Growth Scheme paid out about half of what was promised.

“More of the same SNP failures to support businesses will force companies to close and cost jobs. Business support urgently needs to be expanded but the SNP don’t even seem capable of getting the existing money out the door.

“So in her next statement, I’m challenging Nicola Sturgeon to give a straightforward answer to a simple question: how much of the £185 million has reached businesses?”

Notes

There is no indication the £185 million in support announced a month ago has gone live:

  • On 9 December, the SNP announced £185 million in support for various businesses. (Scottish Government, 9 December 2020, link).
  • On 21 December, the SNP said £104.3 million of the £185 million would be used to support tourism and hospitality and broke down the different funds that would be available. They said that these schemes would open in due course (Scottish Government, 21 December 2020, link).
  • There have been no subsequent updates from the Scottish Government if the schemes are live or what money has been paid out.

Business organisations have said funding is not reaching businesses:

  • The Federation of Small Businesses has said: “Help for Scottish businesses can no longer be a dollar short and a day late. The glut of new support schemes announced at the end of last year need to start delivering cash to firms. So far, few of these have paid out a penny.”
  • The FSB added: “councils and government need to break the administrative logjam preventing money reaching businesses. Independent firms and the self-employed continue to make huge sacrifices. These operators can’t be left high and dry because of poor government systems.” (FSB Scotland, 5 January 2021, link)
  • Scottish Chambers of Commerce chief executive Dr Liz Cameron also said that the support for businesses “must be expanded and all cash support paid out urgently.”

There is at least £700 million from the UK Government unallocated:

  • The Scottish Government has been keeping £330 million in reserve, to deal with the contingencies, primarily the impact of a potential end to the EU transition with no trade deal (SPICe blog, 16 December 2020, link).
  • On 23 December, the UK Government announced £400 million in extra Barnett Consequentials that have yet to be allocated by the Scottish Government (HMT, 23 December 2020, link).
  • The SNP have not set out how that £730 million will be spent.

 

Good Morning Scotland transcript:

Laura: In terms of the £8.6 billion that has been allocated to the Scottish Government, do we know how much so far has actually been spent?

Hyslop: So, the Finance Secretary has written to the Finance Committee in the Scottish Parliament and she's published figures as to the allocations of consequentials and where they have been spent. She does that each and every review, obviously there's more precedence now because there is far more in the year additional funding than there would be in a normal year, this is not a normal year, this is unprecedented. So, the autumn, the spring budget review, the summer budget review I think that was put back by the UK Government, so it ended up being more in the autumn period. That autumn period review she has laid out where the spending has been, not all of it is obviously going to be in business. Health consequentials, as you can understand, big pressures on the health budget. And also social care, we haven't discussed the additional funding- 

Laura: So, we do not know as of yet how much has been spent to support business?

Hyslop: Yes. The information about the allocation for business support has been set out by Kate Forbes, I have written to Members of the Scottish Parliament on a number of occasions setting out where the funds are allocated to, obviously a lot of the spend is demand-led remember, so we are still having to make sure we are providing funding to health businesses in March and in early April from what we understand will be a really restricted period. We don't know how long this will last, but we have got to budget now for spend that might not actually go out the door till March, because we don't know what level we will be in when we get to March. 

£6 million of £30 million fund paid out:

The last funding stats are available here, showing just £6 million of £30 million funding had been paid out as of 18 December, the last time figures were updated – https://www.gov.scot/publications/covid-19-strategic-framework-business-support-funding-statistics-18-dec-2020/

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