Business leaders in North Wales are calling for a new £3 million hardship fund to be set up provide urgent help for companies who don’t qualify for any of the emergency Covid-19 support.
The plea has come from the North Wales and Mersey Dee Business Council, the umbrella body for the private sector in the region, who say many firms are falling through the cracks and are on the verge of going bust.
According to the Business Council, whose members include the Chamber of Commerce, the FSB, North Wales Tourism and Creative North Wales, it would be a disaster for the economy if the companies under threat were allowed to fail, creating “wholesale job losses”.
According to Commercial Director Ashley Rogers, they were “extremely grateful” for the unprecedented multi-billion packages of funding already announced by the UK and Welsh governments, with the support of local authorities.
But more was needed to be done to plug the gaps in the support so that hundreds more North Wales businesses could be safeguarded and helped to survive the crisis.
Mr Rogers said:
“Among the businesses we are particularly concerned about are many start-op ventures less than two years old and businesses where directors are the sole employees.
“These are still not eligible for any supports from government and as a result of the Covid-19 crisis are under considerable financial pressure and many are going out of business.
“With that in mind, the Business Council is asking Welsh Government with support from the UK Government for a catch-all North Wales Regional Hardship Fund (Cronfa Caledi Rhanbarthol Gogledd Cymru) to support all those businesses that currently are not benefiting from the existing support schemes.
“What we need is a hardship fund that can immediately cover a wide range of situations and businesses where those businesses can prove they have been substantially affected by the crisis and that they are not eligible for any other grant or wages support.
“Support should be available by way of hardship grants where straight forward evidence of normal trading before the pandemic and impacted trading because of it, is provided, for example bank statements showing income and expenditure.
“The fund should also provide extra grant support for those businesses of strategic importance to North Wales, that are not able to fully close down or furlough staff during the outbreak and those that may face substantial costs to re-start their operations when normal trading resumes, where they can prove the current national business support schemes do not cover these unavoidable costs.
“The best example of a business forced to close but still facing substantial running costs now is the Welsh Mountain Zoo in Colwyn Bay where it costs £118,000 each month to feed and shelter the animals and cover veterinary care bills, but they have zero income coming in.
“Welsh and UK Governments have clearly pulled out all the stops to put in place support for businesses but there are still too many exceptions and gaps, so businesses falling through the cracks.
“We are therefore calling for a catch all £3 million grant scheme for our region to support all the exceptions rather than them having to wait for bespoke schemes to be put in place, which takes weeks at a time even with governments moving at the fast pace that they are. This is time some businesses simply do not have.
“We would like to see the scheme administered and delivered on a regional level through partnership with Welsh Government’s regional team, the local authorities and the North Wales Economic Ambition Board.
“The gaps in support for businesses can all be covered in one scheme, a logical and common sense move that our private sector desperately needs.”
Jim Jones, CEO of North Wales Tourism and Business Council Chair said
“It’s clearly obvious there are many businesses falling through the cracks and not getting any support to merely survive this enforced closure. North Wales Tourism welcomes this proposal by the Business Council as hopefully it will target direct help to those that desperately need it.”
Debbie Bryce, CEO of the West Cheshire & North Wales Chamber of Commerce said
“There will undoubtedly be a substantial impact on the North Wales economy due to Covid-19, whilst businesses have welcomed the UK and Welsh Government support packages announced in recent weeks it is vital that more work is done to address the shortfall in support available to those who have fallen through the gaps.
“In particular the self-employed who have taken significant risk leaving secure jobs in the 2019/20 tax year to start their own business and those small limited companies, usually with one or two directors (and no other employees) who take a small salary through the PAYE scheme and are mainly paid via dividends as advised by their accountants.
“Welsh Government has very much encouraged start-ups in the past, they now need to step in to support these businesses or many will be lost before they’ve been given a fair chance to get off the ground.”