A lack of reliable local economic data and difficulties in turning high level Ministerial announcements into practical actions in real businesses hampered efforts to mitigate the economic impact of Covid, the Federation of Small Businesses (FSB) has told the Scottish Covid-19 Inquiry.
On the opening day of evidence on the business and welfare impact of the pandemic, FSB told Lord Brailsford’s Inquiry that it proved hard “to fit the world in which FSB members live and do business into the world that government inhabits”.
“It was incredibly difficult to come up with public policy solutions that would work around the number of complicated lifestyles that many people running businesses have,” the business group’s witness statement reads. “Arguably, that is why there were nearly 180 grant schemes.”
Speaking after the session, Colin Borland, FSB’s Director of Devolved Nations, who was one of three FSB witnesses giving evidence, said:
“This was a heartbreaking period for many small businesses in Scotland – 20,000 of whom didn’t make it out the other side. That’s not just an economic tragedy, it’s a personal one. For so many small business owners, your business isn’t just a job. Your life savings, your family home, your pension and more might all be tied up in an enterprise you’ve spent decades building. Business owners are also acutely aware of their responsibilities to their employees, customers and wider communities, so were determined to stay afloat.
“What we saw, though, were some long-standing issues with the mechanics of government in Scotland being becoming painfully apparent – and that’s what we hope we can learn from.”
Explaining how firms struggled under rapidly changing lockdown rules, due in part to the way changes were communicated, FSB’s Regional Development Manager, David Groundwater, cited the example of the Aberdeen local lockdown in August 2020:
“The communication of the extension for the local lockdown restrictions was often slow and inaccurate, which caused confusion for businesses and residents. Even once announcements had been made in the Scottish Parliament or at the First Minister’s daily briefings, it sometimes took approximately six hours for the updates to be made available across the Scottish Government and local authority platforms.
“Many businesses felt that a longer timetable with indicative dates for re-opening would have been more appropriate and allow better planning to make arrangements for re-opening.”
FSB also noted instances where there appeared to be a lack of communication between the Scottish Government and local authorities, with FSB pointing out support available that councils did not know about. FSB were told that in some cases grant letters were issued to local authority staff who had left their post, meaning funding was not distributed for a period by that local authority.
On the operation of emergency business grants, Garry Clark, FSB’s Development Manager for the East of Scotland, said:
“Because we didn’t have reliable local economic data about who makes up the local business base, the authorities had to rely on imperfect proxies – such as the valuation roll for non-domestic rates. This has the advantage that it’s a readily available list, but the downside is it’s designed to enable the collection of business rates, not identify and map businesses that, say, require targeted grant support.
“Nearly half of our members are either home-based or do business from a public space. They don’t have commercial premises, so won’t feature on the roll at all. Equally, it can be hard to see what a business actually does just by looking at the roll. For example, there were cases of retailers initially being refused help because they were classed as warehouses by virtue of being based on an industrial estate.
“Whereas experienced economic development staff might know the firm and bring that knowledge to bear, staff had to be drafted in from all departments to help administer the support – and this could lead to a ‘computer says no’ approach.”
ENDS
For further information, contact:
Euan McGrory [email protected] 07734 509 227
Colin Borland [email protected] 07917 628 939
Notes to editors
- The Federation of Small Businesses (FSB) is a non-profit, non-party-political organisation that offers its members a wide range of vital business services, including advice, financial expertise, support and a powerful voice heard in governments. Founded in 1974, FSB celebrates its 50th anniversary in 2024. More information is available at www.fsb.org.uk.
- Micro and small businesses comprise almost all enterprises in Scotland (98%), employ 900,000 people and turn over £82bn.