Liverpool city region business leaders welcome Chancellor’s £30bn stimulus but The Women’s Org CEO Maggie O’Carroll warns many small firms are still facing a cashflow crisis. Tony McDonough reports
Small and medium-sized businesses across Liverpool city region are facing a cashflow crisis, business leader Maggie O’Carroll is waning in her resumes to the Chancellor’s summer statement.
In the House of Commons, Chancellor Rishi Sunak delivered a £30bn economic support package focused on hospitality, housing, green energy and jobs and training in a bid to fuel the UK’s recovery from the coronavirus crisis.
His package was broadly welcomed by business leaders in Merseyside but Maggie O’Carroll, chief executive of leading social Enterprise, The Women’s Organisation, warned many businesses were facing a bleak outlook and said more support was needed.
Based just outside the city centre, The Women’s Organisation has helped more than 60,000 women to create, or improve, their own businesses since 1996. Via the city region Enterprise Hub programme it supports fledgling entrepreneurs and it has offered its services to more than 2,000 people during the COVID-19 epidemic.
Ms O’Carroll said: “As we heard, the hospitality and tourism industries employ more than 2m people across the UK, with women, BAME and young people accounting for a disproportionate amount of these workers.
“While we of course welcome the chancellor’s support of these sectors and the protection that this should offer these groups, there is a real risk that other sectors, particularly SMEs, are being left behind in the Chancellor’s plan.
“We urgently need to see more financial support in place for SME’s which are viable in the long-term but are facing an immediate cash flow problem. These are the very businesses which would stand to benefit most from schemes like the re-employment bonus but might not have the financial capacity to operate even with this support.
“Without the right financial injection now, we risk losing these enterprises altogether, along with the creation of decent jobs down the line. When it comes to the Chancellor’s plan for jobs, supporting start-ups will be crucial in creating new quality employment opportunities.
“Programmes such as Enterprise Hub offer an incredibly valuable resource in equipping aspiring entrepreneurs with the skills, knowledge, and support to successfully launch and grow new enterprises. A major scale up of investment into small business support schemes like this will be essential to aiding long-term economic recovery.”
Liverpool City Region Metro Mayor, Steve Rotheram, also gave a cautious welcome to the Chancellor’s statement but agreed that more would need to be done. He said: “Over the last few months I have spoken with the Prime Minister and Chancellor about the need to introduce a Young Person’s Guarantee, so I welcome today’s announcement, but will be looking at how and when funding will be distributed.
“I also welcome the short-term measures to support hospitality and the visitor economy, which are vital for our city region. As the Chancellor acknowledged, the country still faces hard times ahead. Many of today’s measures are short-term and month-to-month, but really our local councils and businesses need a properly funded, longer-term plan, and many will not be able to wait until the Budget in the autumn.
“We’ve already seen record numbers of applications for Universal Credit over the course of this crisis and, I fear that unemployment will continue to rise as the furlough scheme comes to an end, unless there is further targeted support beyond what was announced today.”
Richard Roberts, head of retail at Liverpool law firm Brabners, said: “Whether the announcement today will be enough to change consumer attitudes is another question, but it does offer a much-needed glimmer of hope for the sector.
“Footfall will be a crucial stimulus for the economic recovery. As such, the VAT cuts announced today will play an important role in re-energising the future of physical retail, particularly in those locations which have developed a blend of leisure and hospitality offerings that turn town centres and shopping districts into destinations for consumers.”
Putting the emphasis on the “future of young people” was an aspect of the Chancellor’s speech welcomed by Sean Keyes, managing director of Liverpool-based civil and structural engineering firm, Sutcliffe.
Mr Keyes told LBN: “Training and nurturing future talent is key in the economy’s post-Covid recovery. As a direct result of today’s announcement, Sutcliffe will be able to take on one or two more apprentices each year, which is fantastic.
“I am buoyed by the Government’s £3bn green pledge – the environment is moving up the agenda and finally being taken more seriously by those in power. Saving energy is so important and the UK must become a leader in this if we are to avoid the threat of a future environmental disaster.”
There may be a concern among businesses that the Chancellor’s Kickstart placement scheme for hose who are 16-24 may place a extra burden when they are already overstretched.
That’s according to Ed Dwan, partner and head of accountancy form BDO’s North West operation, who said a significant level of support would be needed to make sure the scheme was a success.
He said: “When we asked business leaders “what should be the top priority Government spending until 2025?”, 72% agreed that boosting businesses and jobs was where the emphasis should be placed.
“Somewhat conversely, only 2% felt education and training should be prioritised. This suggests that for a work placement scheme and traineeships to be truly effective, businesses will need practical support as well as funding to get the buy-in which will bring its intended benefits to life.
“It can’t be underestimated the pressure business owners have been under in recent months to protect jobs and their future. Running quality placements and traineeships which add real value is time and resource intensive.
“That said, with the right government support, strengthened links with education and effective regional and cross-sector collaboration, this scheme could be a much-needed intervention for the next generation of employees and the businesses which have the potential to create future jobs.”