Swindon & Wiltshire News
Summer Statement schemes fall short in protecting firms and jobs – British Chambers
Businesses are still facing significant cashflow challenges with the schemes announced in the Summer Statement failing to provide support at the scale needed to protect jobs after the furlough scheme winds down.
That’s one of the key findings of the latest Coronavirus Business Impact Tracker from the British Chambers of Commerce – the first comprehensive survey of business sentiment on the Chancellor’s Summer Statement announcements of July 8.
The survey found more than half of firms report cashflow decrease since June 2020, more than a third of respondents with improved cashflow cite furlough scheme cash.
Forty-three percent of firms said they intend to use Furlough Bonus – which will award £1,000 to firms who retain furloughed staff until January – but other Summer Statement support schemes have low take-up.
Fifty-six percent of businesses said they did not intend to use the Kickstart scheme, a further 31 percent said they had not heard of the scheme and eight percent said they would like to use it but are ineligible.
Sixty-two percent of firms said they did not intend to use grants for employers who take on trainees and 65 percent of firms said they did not intend to access grants for those who hire apprentices.
And twenty percent of respondents said they would like to make use of the targeted VAT cut for certain businesses but that they were ineligible, indicating that some businesses think the scope of the scheme is too narrow.
Meanwhile, figures from the BCC’s latest Quarterly Recruitment Outlook found that almost a third of firms (29 percent) expect to decrease the size of their workforce in the next three months. And just 12 percent of firms are planning to recruit staff this quarter.
The BCC said it would continue to call on government to reduce the overall cost burden on firms to protect business and preserve as many jobs as possible in the coming months.
It has called for an 18-month expansion of the Employment Allowance from £4,000 to £20,000 and an increase to the threshold for National Insurance contributions from £8,788 to £12,500. The latter could save businesses around £500 per job.
Commenting on the findings, BCC co-executive director, Claire Walker, said: “Business communities continue to face significant operational challenges, with a prolonged period of reduced sales and cashflow meaning many firms are showing signs of distress.
“Expected usage of schemes announced in the Summer Statement is relatively low, indicating they do not provide the right kind of support for many businesses at this critical time and a rethink is needed.
“With confidence and demand not returning at the scale firms need, the government must take radical steps to slash the tax burden around employment to help companies pay valued staff.
“A major boost to the Employment Allowance and an increase in the threshold for employers’ National Insurance contributions are needed now if he wants to help viable companies save jobs as the furlough scheme comes to an end.”
The organisation’s tracker survey, which serves as a barometer of the pandemic’s impact on businesses and the effectiveness of government support measures, received 517 responses and is the largest independent survey of its kind in the UK.
