Many firms all at sea as they try to ride out coronavirus storm

THE current position for businesses – whether they are self-employed, SMEs, companies, PLCs or other organisations in Somerset, South West and the wider UK – was aptly described to me as being all in a storm together but riding it out in different sized boats.

I felt that explained the situation well. With the initial announcement from the Chancellor of the package of measures to help and support businesses we have seen sharp contrasts.

The furloughing scheme was only ever designed as a short-term fix to support cashflow and slightly ease the immediate pressure. The running costs of the companies and businesses they worked for were still in place and creditors such as banks, landlords, suppliers and vehicle/ capital leasing all required payment.

There was the additional business rates relief scheme, with Somerset County Council being given £151.4m to distribute between our four district councils to allocate in grant funding to just over 12,000 Somerset businesses that had been identified as meeting the Government’s criteria for grant relief.

However, examples of financial support vary greatly. I have spoken to the owners of a small guest house who have received a £10,000 grant and furloughed their only member of staff. They said from a trading perspective they were financially in a good position and actually didn’t need to reopen until next year.

In stark contrast, larger businesses within our tourism, leisure, restaurant, event and hospitality sectors have been decimated.

They have seen a huge percentage, if not all, of their income cease. Some fall outside the grant and support schemes and, although all staff have furloughed, the future is looking bleak.

They are unable to recoup income from lost high trading periods such as Mothering Sunday, Easter, half term and bank holidays. Even if they re-opened within the next month most are looking at a financial loss for 2020. Sadly, many of these businesses may yet still fold.

These businesses are already taking guidance on wide-scale redundancies. Heavily reliant on tourists and day trippers, these businesses are caught between a rock and a hard place. Lifting non-essential travel, other than to exercise, and allowing groups and crowds to gather risks a spike in coronavirus and there is still no vaccine or wide-scale testing.

However, if there isn’t a change soon, the impact on our businesses will be irreversible.

The news that businesses can reopen if it is safe to do so and the extension of furlough across all sectors until October is to be particularly welcomed.

It is also vital we continue a phased return to work. We have seen supermarkets self-police social distancing and there is no reason to suppose our visitor/tourist destinations, museums, showgrounds and parks cannot do the same. This will at least start to see income and trading conditions improve – if only gradually.