COVID-19 Business Resilience Newsletter May 2020

Read the latest round-up from David Ralph, HotSW LEP CEO

Heart of the south west LEP - COVID-19 Business Resilience Newsletter May 2020

As lockdown endures for many businesses, especially in prevalent sectors in our area such as tourism and hospitality, we bring you an update on effects of the pandemic on the local business community and the latest on the LEP and partners’ measures on response, resilience and recovery.
The scope of our work has been to coordinate an understanding of the impact on the local economy and business; mitigating where possible. Workstreams include recovery planning; employment; support for businesses; key sector impacts and intelligence & evidence.

Integral to the support for business is our single-point of contact – the Heart of the South West Growth Hub – which has just published its latest newsletter giving a really clear synopsis of Government and others’ support packages, with links to what our expert advisers believe are the best resources. In addition, we’re publishing regular articles in our Latest News feed that includes a round up of recommended webinars that may be of use to businesses and employees upskilling to work on-line or adapt to new ways of working.

Our Digital Skills Partnership (HotSW DSP) has been extremely valuable in helping people and businesses upskill their online activity and remote working practices. Regular DSP newsletters are published; you can sign up here and the latest DSP COVID-19 Digital Tools and Skills Update is available here. We’ve developed additional resources on our website to help those affected by recent job losses gain employment or training through our Virtual Careers Fair, with a new set of initiatives to be launched very soon.

We’ve been giving regular feedback to our local MPs and the Government’s Local Growth Team to keep them abreast of the issues being raised by the business representative organisations (BROs) and by individual businesses; which is proving to be effective in bringing about some adjustments to policy. The latest Quarterly Business Bulletin which summarises the findings of the major BROs in our area was published today and sent to all HotSW MPs.

LEPs nationwide are working collectively to communicate the main issues and suggestions to decision makers in Westminster, and we welcome some of the changes that have been made as a result, such as the discretionary business grants being able to address some gaps that were left behind by the first tranche of financial support. In this area we were keen to highlight the discrepancy that fishing boats were not classed as business premises therefore were not eligible – this has now been addressed by increased flexibility on grants.

Other welcome developments have been the extension to the furlough scheme and sole traders programme. Our area has a high number of micro-businesses; and the hospitality sector plays a huge part in the local economy; and it being one of the sectors expected to be one of the latest to be released; increases the proportionate effects here.

We need to land the message at all levels of Government that the south west region could be the worst hit economically with the effects lasting longer and being felt more deeply. Therefore the “levelling up” agenda which was gaining traction before the virus hit needs to be ever at the forefront of our aims. Specifically, an early ask from Westminster is to confirm the Tourism Sector Deal, as well as the wider adoption of the Great South West or similar regional geography being formally established.

We continue to drill down into detail through the Local Resilience Forums and the Heart of the South West Economic Resilience and Opportunities Group (HEROG) and we’re progressing a plan for recovery that is expected to be published in its first draft for comment by the end of this month. The plan will:

  • Be informed for real time evidence but recognise the commitment to Health First
  • Recognise phased approach to recovery – Restart-revitalise-grow – which seems consistent with Government and other business representative organisation thinking
  • Identify specific actions on key sectors and key economic assets
  • Identify our responses around the themes – People, Infrastructure and Places, Ideas (R&D Innovation) and Support to Businesses
  • Affirm our commitment to Clean and Inclusive Growth being the route map to the ‘right sort of recovery’
  • Consult widely and have agreement from local stakeholders to secure local support and confidence
  • Deliver a draft by the end of May to test against health and economic models
  • Recognise that a regional conversation remains relevant.

We know that these are challenging times, but we do have the potential to build back stronger and better, with an increased focus on clean and inclusive growth.

Below is a brief explanation of what support has been provided already, and a run-down of some business feedback we’ve captured via the Growth Hub. One message to take away is to encourage any business that has not already claimed an emergency business grant to do so as soon as possible. No expiry date has been published but it’s not expected to be available indefinitely.

Stay safe and keep in touch, David.

Progress on sector support

Heart of the south west LEP - COVID-19 Business Resilience Newsletter May 2020

We’ve reiterated our the recommendations to Defra from the nationally acclaimed South West Rural Productivity Commission report that remains ever-more relevant.

We’ve also worked with partners to launch the SW Food Procurement Hub which could help deliver more dynamic and local food procurement in line with the RSA Food and Farming review. This follows the good practice in Plymouth for example, Call4Fish which enables fishers sustain a market during the lockdown of hospitality outlets.

And we’re exploring the necessary support for our key industrial capabilities: Hinkley Point C, Devonport shipyard, Oceansgate and the wider Marine sector, Digitalisation and Technology transfer and Exeter Airport as well as the universities. These assets together with getting our construction sector moving will be vital for recovery.

Government Support to Business

Heart of the south west LEP - COVID-19 Business Resilience Newsletter May 2020

A user-friendly guide to the Government’s support for business for a business audience is regularly updated on the Growth Hub website, and here is an outline from a strategic partnership perspective on the support progress in HotSW:

  • In total some £540m of emergency business grant (administered through the 14 Unitary and District Councils) has been available as at the first week of May, and about 70% had been distributed according to Government figures
  • Around 15% of this funding may be undistributed – so businesses are called upon to get their applications in. LAs and the LEP have asked for the remainder to be retained locally and distributed under the more flexible arrangements. Our goal is to get the funding out as soon as possible and keep it local.
  • In addition, the Government has agreed a 5% top-up funding (of some £600m) although details are still to be announced
  • Business Interruption Loan Scheme data is not available locally yet.
  • The Bounce-back programme went live on 4 May which provides a simpler programme for smaller loans – £2k to £50k
  • The Furlough scheme has been extended to the end of October with increased flexibility from the end of August to enable people to go back part-time, which we asked for through the HEROG group early in the lockdown.
Heart of the south west LEP - COVID-19 Business Resilience Newsletter May 2020

The Growth Hub team observations and the demand for recovery business support indicate that many businesses are now planning, or have started, the recovery phase. Encouragingly, there have been a number of business start-up enquiries recently.

Headline issues from businesses to the Growth Hub are:

  • Significant concerns about phased return to work
  • Need for support to understand and implement social distancing and Health and Safety procedures and policies to enable return to work
  • Businesses (especially construction and manufacturing) concerned about supply chain and demand being out of pace with the return
  • Directors who take small salary dividends are still excluded under Government Schemes.
  • Business Interruption Loan Schemes (CBILS) are still slow or inaccessible for many
  • Hospitality, leisure and retail sectors likely to experience longer impact so will need further support
  • In Agriculture – Volatile prices and markets continue to affect this sector, and there are concerns about eligibility criteria for various forms of support, and the availability of labour for the harvest.
  • In the Food and Drink sector – Taste of the West reports that most of its network has suffered a 50-90% drop in sales. The sector is strongly linked to the tourism and hospitality sectors.
  • In Manufacturing – There are concerns about the length of time needed to re-establish production lines to 100% capacity and the effects on staff retention, supply chains and loss of contracts.

Behind these headlines is extensive data provided confidentially by individual businesses, which is shared with Government to help shape their policy and improve our Growth Hub service.

Heart of the south west LEP - COVID-19 Business Resilience Newsletter May 2020

The latest Quarterly Business Bulletin from the LEP and major business representative organisations has been published today. This quarter features impacts of the coronavirus and gives headline statistics and thoughts on the post-COVID-19 future.