Cash remains top concern for lockdown-stricken firms across UK

By Ana Christie, CEO Sussex Chamber of Commerce

Sussex Chamber of Commerce is part of an Accredited Chamber network of 53 Chambers, all represented by the British Chambers of Commerce which sits at the heart of this unique network of businesses across the UK. We build relationships on every level, connect your business locally, nationally and internationally with other business, with decision-makers and with opportunities. Sussex Chamber gives you access to a range of exclusive member benefits, designed to contribute towards the success of your business. We are also a respected voice locally and nationally.

During the pandemic, the business group has successfully campaigned for continued financial business support. Having carried out a recent survey on the impact of Coronavirus on businesses, the results show they have been pushed to the brink by the effect of multiple lockdowns.

We have called on the UK government to set out a clear roadmap for reopening, which was recently announced, advancing vaccination and workplace testing plans, and extending key financial support measures for businesses throughout 2021.

Business conditions worsen

Compared to October 2020, 61% of firms reported decreased revenue from UK customers. Only 19% of firms reported increased revenue and 20% reported no change.

When asked approximately how long firms could continue until they ran out of cash, almost one-quarter (23%) said less than three months. This figure rises to almost one-third (31%) of B2C service firms.

The results paint a bleak picture of a business landscape which has been severely squeezed by repeated lockdowns and massive changes in trading conditions. The survey results also suggest that without the huge amount of government support given to companies to date, that business failures and job losses could have been much worse.

Crucially, more support is needed until firms can fully reopen, with just over a quarter (28%) of businesses indicating they have enough cash to last more than a year. On average, B2C firms are currently operating at only 42 per cent of full capacity, while all firms were averaging 57% capacity against a pre-pandemic level of 75 to 80 per cent. Almost half (48%) of companies reported they still have staff on furlough.

Rating the support from government

When asked to rate the effectiveness of the various government schemes to support their business throughout the crisis, the Coronavirus Job Retention Scheme (CJRS), allowing firms to furlough staff, had by far the highest effectiveness rating. More than two-thirds (68%) using this scheme say that it has been very effective, with a further 28% rating it as somewhat effective.

Other schemes with high effectiveness ratings included Government loan schemes (such as CBILS and BBLS) where 46% rated them ‘very effective’ and 44% rated them ‘somewhat effective’, and the local authority business grant scheme, where 45% rated it ‘very effective’ and 40% rated it ‘somewhat effective’. Business rates relief (49%), VAT deferrals (34%), VAT cuts for certain sectors of the economy (26%) were also rated as very effective.

What firms may do if support expires in April

When asked what their business might do if the government support schemes end according to published timetable in April, 25% of firms overall said they would ‘make staff redundant’, 25% would ‘reduce staff hours’ and 19% would ‘cancel or reduce investment or recruitment plans’.

Responding to the survey results, British Chambers Director General Dr Adam Marshall said:

“The last year has taken a heavy toll on businesses across the UK. With cash flow still the top concern, it is vital that the UK government keeps financial support going until firms can reopen and rebuild. Pulling the plug now would be a huge mistake and would be akin to writing off the billions already spent helping firms to survive.

Firms are desperate to start trading again so they can boost revenue and start thinking about the future. To do so they need to see a clear, evidence-based plan for reopening, and they need time to get back on their feet without unnecessary additional taxes, and the security of knowing that Government will once again support them should we see additional restrictions imposed at any point.

In the meantime, support must remain in place for firms that need it until a full reopening of the economy is possible. With cashflow being a major challenge for many businesses, we can expect to see further redundancies or business failures should Government support end prematurely.

Alongside a clear roadmap for reopening, business confidence will also come from a commitment to further accelerate the vaccination programme and a wider workplace testing strategy that’s accessible to businesses of all sizes.”

Support from Sussex Chamber

Sussex Chamber will continue to support businesses through its campaigning efforts and via its extensive membership benefits. Membership prices have been frozen, to allow businesses to access a range of exclusive member benefits, designed to contribute towards business success and help drive economic growth. www.sussexchamberofcommerce.co.uk

Contact us on 01444 259259 or email: info@sussexchamberofcommerce.co.uk to find out how we can help your business.