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Lockdown Grants ‘Won’t Be Enough to Save Some Firms’

By Jon Munnery
5 January 2021

The government’s pledge to provide grants in support of businesses affected by the latest lockdown measures in England will not be enough to save many firms across the country.

That is the view of the British Chambers of Commerce (BCC), which has welcomed the promise of a fresh round of financial support for struggling businesses but called for more of an over-arching strategy from the government to help companies survive the Covid-19 pandemic.

Chancellor Rishi Sunak said the government will be providing £4.6 billion in grants to protect businesses and jobs after the prime minister announced another strict lockdown would be necessary throughout the early months of 2021.

The grants are intended primarily to help businesses in the retail, hospitality and leisure sectors, with companies able to claim up to £9,000 per property as one-off payments during the latest lockdown.

However, the BCC has called for more support for businesses within supply chains which are also set to feel the financial impact of the strict lockdown that is now in place across England and most of the UK.

According to the BCC, many thousands of firms which are not frontline retail, hospitality or leisure operators could well be devastated from a cashflow perspective by the latest Covid restrictions.

“Many smaller firms won’t qualify for the full headline amounts set out in the chancellor’s statement, and will be left struggling to see how this new top-up grant will help them out of their cashflow problems,” said BCC’s director general Adam Marshall in a statement.

Mr Marshall called on the government to move away from its “drip feed approach” to providing financial support and towards a more comprehensive strategy that allows businesses to “plan and ultimately survive” beyond the Covid crisis.

“While this immediate cash flow support for business is welcome, it is not going to be enough to save many firms,” Mr Marshall said. “We need to see a clear support package for the whole of 2021, not just another incremental intervention.”

Jonathan Munnery
Insolvency & Restructuring Expert
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