Only seven of 30 SNP business funds have launched

The Scottish Conservatives have slammed “inexcusable delays” to the SNP’s delivery of business support after it was revealed that just seven of 30 SNP business funds have launched.

A Cosla document given to the Scottish Conservatives shows some funds will not launch until February or March, months after restrictions came into force, despite the SNP promising they would launch in January.

The latest statistics show as little as £6 million of new funding announced since late October has reached businesses.

None of the £185 million announced on December 9 appears to have been delivered and it is unclear how much of the £30 million discretionary fund announced on 21 October has been paid out.

Just £6 million of the £30 million Strategic Business fund has been delivered, according to the latest Scottish Government statistics.

Figures from the Federation of Small Businesses (FSB) show business confidence in Scotland has plummeted further.

Scottish Conservative leader Douglas Ross said: “These inexcusable delays are fuelling growing fury from businesses that so many SNP funds are failing to deliver any cash at all.  

“The Scottish Conservatives have put forward proposals to break the “administrative logjam” and get funding to businesses now.

“A 10-day turnaround guarantee and expanding the grants available would be a welcome first-step towards restoring business confidence, which has hit rock bottom, according to figures released today by the Federation of Small Businesses.

“Jobs will be lost and businesses forced to close because the SNP couldn’t get cash out the door quickly enough.”

On click and collect, Douglas Ross said: “Restrictions need to be based in evidence and, as retail bodies have said today, nobody has seen any data to support this move.

“Shutting down click and collect services could drive more people to shop in supermarkets, so this decision needs careful consideration. It can’t be based on a hunch.  

“If evidence does show that limiting those services will save lives, extra funding from the SNP will be necessary to keep businesses afloat.”

 

Notes

The document is attached.

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).
  • 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 FSB said: “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)

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.

The Scottish Conservative proposals to restore business confidence include:

  • Establish a 10-working day national standard for new business grant applications to be processed and a decision made. We need to see a national standard established across Scotland for businesses to have their applications for funding assessed. For example, in the first month of the Strategic Framework Business Fund, nine councils were able to process all of their applications, including Aberdeen City and Scottish Borders, yet  in South Lanarkshire 88 per cent and in East Renfrewshire 80 per cent of applicants were awaiting a decision by 30 November. Delivering a national standard will also give a benchmark to assess council performance (Scottish Government, Coronavirus (COVID-19) Strategic Framework: business support funding statistics, 18 December 2020, link).

 

  • Ensure councils are properly resourced and supported to process applications and clear the backlog. The SNP Government should do far more to offer support to councils that are struggling to manage the grants payments system. Funding and expertise should be given to councils so that they are better able to process applicants and meet the national standard. This could include seconding Scottish Government civil servants to councils or pooling expertise through COSLA to support councils that have been unable to process applications.

 

  • Expand the local authority discretionary fund to support businesses, like suppliers, that have been unable to access other grants. The SNP Government has given councils £30 million to provide additional support to local businesses and employers beyond national guidance. We believe that this fund provides the best way of ensuring that support is given to businesses that are ineligible for other funds and have fallen through the gaps. However, £30 million is nowhere near enough funding, so we are calling on the SNP Government to expand this fund to enable more businesses to receive vital support (Scottish Government, Coronavirus (COVID-19): local authority discretionary fund – information, 18 December 2020, link).

 

  • End the ‘press release first, guidance second’ culture for new business support funding. The SNP Government announced £185 million of support for several sectors on 9 December yet there is still no guidance for businesses to apply to receive this funding. It is wrong that businesses are having to wait weeks for guidance on funds that have already been announced. That is why we need to end the culture in the SNP Government of putting out press releases weeks ahead of the practical measures being introduced.

 

  • Simplify the grants system, to make it easier for councils to manage and businesses to apply to the funding they are entitled to. The SNP Government has created a myriad of funds and payment schemes that businesses have had to apply for during the pandemic. The SNP Government should look to streamline the system by extending the eligibility for existing funds in future rather than creating new ones. This will make it easier for councils to manage and for businesses to apply for the funding that they are entitled to.

 

  • Match the UK Government commitment to pay up to £9,000 as a one-off grant to retail, hospitality and leisure businesses this month. The SNP Government has only announced that it will make a one-off payment of up to £3,000 for hospitality businesses. In England, the UK Government is paying £4,000 for retail, hospitality and leisure businesses with a rateable value of under £15,000, £6,000 for those businesses with a rateable value of between £15,000 and £51,000 and £9,000 for businesses with a rateable value of over £51,000. All of these payments are on top of those made through the Strategic Framework in Scotland or the Local Restrictions Support Grants in England. The SNP Government has £730 million in funding from the UK Government that remains uncommitted which should be used to make payments (Scottish Government, 9 December 2020, link; HMT, 5 January 2021, link).
  • Carry over 100 per cent rates relief for retail, hospitality and leisure businesses into 2021/22. We have called on the SNP Government to carry over the 100 per cent rates holiday for retail, hospitality and leisure businesses that was introduced for 2020/21 into next year and continue the general poundage rate freeze. The SNP Government estimates that this would cost £900 million. The SNP Government is received £1.3 billion so far in funding to manage the coronavirus pandemic from the UK Government for 2021/22 (Press & Journal, 3 November 2020, link; HMT, Spending Review2020, 25 November 2020, p89, link).
  • Undertake a rapid review of business grant limits and eligibility. We have called on the SNP Government to urgently review the restrictions and closure grant limits and the eligibility for receiving them with a view to moving towards a more generous system. We have also said that businesses in restrictions should be able to voluntarily close and access the full closure grant.
  • Introduce a break on new non-Covid related business regulation. We have called for a temporary pause on new non-Covid related regulation on businesses.

 

  • Appoint a ‘Coronavirus Business Restrictions Advisory Council’. We have called on the SNP Government to create a group of business advisers to give advice on the setting and introduction of restrictions and the grants system. This will ensure that public health concerns are weighed against economic concerns at the heart of government and that the guidance produced reflects what businesses need to comply with.

 

  • Sturgeon said that she was considering this “proposal sympathetically” but has not taken it forward. “I said that we would consider that proposal sympathetically; that remains the case…. We want to ensure that businesses are involved, as far as possible, in the decision-making process and that they have an understanding of what drives those decisions.” (Scottish Parliament, Official Report, 29 October 2020, link).
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