Response to the Coronavirus (Covid-19) Strategic Framework: Business Support Funding

Commenting on the publication of the Coronavirus (COVID-19) Strategic Framework: Business Support Funding Statistics (Tranche 5) which showed that;

  • As many as 21,000 businesses faced rejection when applying for support, yet only 79% of the amount set aside for the period of 2nd November 2020 to 22nd March 2021 was spent from the Strategic Framework Business Fund (SFBF);
  • Over 1/4 of applications to Local Authority Discretionary Funds were rejected, referred or deferred, and only £38m of £120m available to these funds had been allocated as of 26th of March;
  • 30% (21,054) of SFBF applications were rejected, and 1% (1,420) were either referred or deferred. The remaining 2% were still awaiting processing;
  • The Taxi and Private Hire Driver Support Fund closed on 25 March 2021, yet only 64% of eligible drivers have been granted funding support and only 57% of the budget has been spent;

Daniel Johnson, Scottish Labour Finance Spokesperson, said:

“Lock down has brought many businesses to the point of collapse so these statistics showing large underspends and thousands of businesses rejected for support grants will leave many local business feeling abandoned and worried about their future.

“There are now critical questions about why funding has been slow to be provided, how it has been administered and how could there both be such large underspends and rejection rates. The fact that even the discretionary fund – which was supposed to be for those businesses that had fallen through the cracks – has been underspent is alarming.

“This is money that should be in the hands of businesses not sitting in Scottish government bank accounts. SNP ministers must urgently confirm that support schemes will extended and set out how this money will be disbursed. My worry is that the consequence of this inaction will be high streets strewn with ’To Let’ signs.

“Scottish businesses need a government focussed on recovering our shattered economy. Only Scottish Labour is committed to National Recovery Plan and rejecting the distraction of the politics of division.”

Rhoda Grant, Inverness and Nairn candidate and lead candidate for the Highlands and Islands Region, said:

“I met with the Finance Secretary, Kate Forbes, just before the Parliament went into recess for the election. She told me then that there was a huge underspend of discretionary funding and I appealed to her to help owners out before their businesses go to the wall.

“I have had strong, normally self-sufficient, business owners in tears telling me the application process is confusing and they feel distraught having to almost plead for funding to save their livelihoods. Through no fault of their own, these owners’ fears for their futures are growing day on day.

“That only one third of the £120m discretionary funding has been allocated, while owners despair, is deeply distressing. The government has to inject a sense of urgency into this and get this money out to the businesses in need now before their worst fears become a reality.”