“Plaiting Fog” and “Watching paint dry” are also phrases that come to mind.  On 18th March, the Chancellor said “We will do whatever it takes” to support businesses and employees through this crisis. Yet, 4 weeks later, businesses are still floundering to access most of the support which has allegedly been offered.  Many businesses have still fallen through the cracks of this support all together, and the others are becoming more despondent by the day (as is your author!). Let me explain why:

  • Rates grants – the local authorities seem to have done really well with this, especially considering they are the least experienced in paying out supportive funds directly.  So for the smaller rateable businesses, money is now flowing. Hats off to the Local Government!
  • HMRC deferrals & TTP – if you are prepared to wait in a queue on the HMRC phone lines, HMRC are seemingly being very efficient at agreeing deferrals for PAYE/NIC etc, Corporation Tax, Duty etc. But why hasn’t there been an announcement that this will be done automatically for all businesses for the next couple of months, just like VAT has been automatically deferred?
  • Banks – CBILS is still a disaster zone.  Enquiries apparently standing at over 300,000 (which is still only 5% of all businesses – shows how little the businesses like it or want it) and yet applications are a fraction of that, and approvals for CBILS loans are a fraction of that. And converting approvals into cash being paid into a business’ bank account is also slow – is it really true that Barclays can’t process loans because their Indian call centre is in lockdown?
  • British Business Bank – seem unable to get banks to communicate clearly about what information is actually needed; seem unable to approve new lenders (esp fintechs) to speed up the flow of money
  • LEP Network (England only) – most appear to be very slow in providing additional solutions to their local areas.  Well done to Coast to Capital LEP who announced a £2m grant scheme for small businesses and social enterprises in their area. They thought it could help 400 organisations, but after only a few days had to close applications because they had been inundated.  Where is the extra funding for them?  Wales Development Bank have announced a series of loans and grants for Welsh businesses, and been provided with additional funding from the UK Government. Why can’t LEPs do something similar? And why have Greater Manchester LEP chosen to use their funds to bolster a CBILS loan fund for their local CDFI, Growth Capital – surely a new grant scheme would have been preferred by the businesses in their region?  LEPs role is to support businesses and employment – they have the systems already in place to do this, but they appear to be doing very little so far.
  • HMRC Job Retention Scheme (grants for furloughed workers) – communications from HMRC have been at best, patchy, and at worst, damaging. Announcing that the portal would be launched on 20th April and that payments would be made within 4-6 days, gave some businesses (and their advisers) hope that the cash could have been received in time for April payrolls, some of which are due on the ‘last Friday’ of the month, Friday 24th April, and certainly for those due on ‘last working day’ of the month, Thursday 30th April.  However, as HMRC still haven’t yet produced enough detail about how the claims process will work, how can businesses and accountants prepare the calculations and reference papers they need to make the grant application before 20th April? Communications from HMRC vary between set dates of 20th April, or w/c 20th April and the Chancellor said in his briefing on 14th April that the portal would be ready ‘on or around’ the 20th April, and monies should start flowing by the end of the month.  This throws business’ cashflow planning up into the air again.  I am very skeptical that any significant grants will be received by SMEs before they are expected to meet their April payrolls and I am certainly advising all businesses not to rely on funds arriving in time.  Uncomfortable conversations will now have take place with many employees this week.  In addition, if HMG don’t announce that this scheme is being extended past 31st May, then mandatory 45 day consultation periods for redundancies will have to start on 18th April.  Surely they realise this?
  • HM Treasury – despite continued assurances that the Government are looking for other solutions, that they are open to hearing ideas, nothing new has been announced for SMEs for 3 weeks.  And despite Paul Scully MP,  and Small Business Minister, saying they are looking for widespread and easy to deliver solutions, he (nor anyone else from Treasury) has been in touch to discuss our proposals and how we think they can, and should be delivered.  Advisers to the Government continue to be city bankers and those from academia or large corporate backgrounds – what exactly do they know about SMEs, their culture, their concerns?  Political platitudes to try and control the media are wearing very thin now.  The reality is, Chancellor, your schemes are not working quickly enough, they are not sufficient, and your nation of shopkeepers is likely to be joining the end of a very long dole queue if you don’t look outside of your corporate banking ivory tower today.

 

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