35% of Scots firms fear not reopening after lockdown

● Report from FSB calls for right support – and hails extension of furlough scheme

More than a third of small business owners in Scotland fear being unable to reopen after the Covid-19 lockdown, but such concerns don’t need to become a reality with the right support, according to a new report published today.

The Federation of Small Businesses (FSB) surveyed 5,471 UK small business owners, with 758 from Scotland. It found 53 per cent of Scottish firms have been forced to close since the beginning of the Covid-19 outbreak, compared to four in ten across the UK.

Of those that have shut – both north of the Border and across the UK – 35 per cent are not sure whether they will ever reopen again.

The small business campaign group is consequently calling for sustained government support for firms grappling with the impact of the crisis. Additionally, the FSB in Scotland wants clear official guidance about the steps busigradually, nesses should take before they consider reopening.

Andrew Mcrae, FSB’S Scotland policy chairman, said: “In the jaws of the crisis, a huge share of independent Scottish firms did the right thing, followed the official advice and shut their doors.

“Our new survey shows that many of these operators worry they’re closed for good. We’re certain, however, that with the right help from government, bigger businesses and the general public, we can ensure these fears aren’t realised.

“But this research does show that many local operators are on a knife-edge.”

Around a fifth of Scottish firms have failed to or are struggling to make rent or mortgage repayments due directly to the economic impact of the lockdown.

Furthermore, seven in ten Scottish small employers have furloughed staff to aid the survival of their business.

Around the same proportion of these say the ability to partially furlough workers would benefit them – 46 per cent want to bring staff back and 28 per cent say it would keep their business viable.

After the FSB report was put together, Chancellor Rishi Sunak announced yesterday that the furlough scheme will be extended until the end of October.

The FSB in Scotland said in a statement that as of August the UK Government will allow employers to partially release their staff from furlough.

The business body commented: “This could allow, for example, a full-time staff member to work a few days of the week and still have their remaining hours covered by furlough payments.”

It said that should make it easier for smaller firms to reopen smoothly when circumstances allow.

Mcrae said the “shrewd decisions from the Chancellor will give thousands of large and small Scottish employers the right sort of flexibility”.

He added: “The move to allow operators to partially furlough their staff while they consider how to get back up to speed should mean more businesses have the right tools at their disposal.”