Bibby Financial Services call for targeted extension of the furlough scheme
The UK government needs to extend the furlough scheme urgently and ensure that targeted support is available to those sectors who have been worst hit, according to Edward Winterton, UK CEO, Bibby Financial Services: “As the government’s furlough scheme begins to wind down, and businesses are asked to contribute to the salaries of staff making use of the scheme, the situation for SMEs across the country is going to get harder. Our latest research found that over half of the UK’s SMEs have seen their payment times increase by more than three weeks, adding further pressure to cash flow. The reality is that if the business case for bringing staff back to the office was there, it would have already been acted upon, but to date just 35% of businesses have brought back staff from furlough.
“Keeping the country healthy is obviously a key concern but the 1m+ distancing guidelines have left over a quarter of businesses unable to operate normally, and nearly a third with reduced capacity to take on new business. As highlighted by the Treasury Select Committee’s report on the economic impact of the pandemic, the key to rebuilding the economy is targeted support to ensure that viable businesses survive. This is a balancing act, and we cannot expect SME owners to flick a switch and return to pre-pandemic levels of productivity. There are solutions available to businesses to better manage cash flow, and secure future growth, but ending the furlough scheme isn’t enough to bring SMEs back to work.”
Edward’s comments come following the publication of Bibby Financial Services latest survey and report*, which looked at the challenges facing SMEs as a result of the pandemic. The survey found that:
- 26% of SMEs cannot conduct normal operations under the 1m+ distancing rules
- 32% of SMEs warn social distancing measures have reduced capacity for growth
- 14% of SME staff have refused to return to work
- 14% of SMEs don’t have capital to buy supplies to fulfil orders
- 19% of SMEs have taken on debt to maintain cashflow
- 49% of SMEs think it will take more than 6 months to reach pre-lockdown levels of productivity
- 35% of SMEs have brought back some staff from furlough
- 16% of SMEs want the furlough scheme extended
- 11% will make redundancies if the scheme is not extended
* The Bibby Financial Services COVID-19 Pulse survey is a poll of 500 SME owners taken from across the UK. Fieldwork for the survey ran from 10 July – 20 July 2020. Research is conducted by Critical Research, one of the UK’s leading independent market research companies.
