In response to coronavirus-related struggles, more than one in three West Midlands small employers have been forced to consider, or have already made, redundancies.
A new study from the UK’s largest business group underscores the threat posed to millions of livelihoods by a sudden retraction of support for small firms in the weeks ahead.
The Federation of Small Businesses’ (FSB) fresh survey of small business owners in the West Midlands finds that four in ten (41%) have been forced to close since the beginning of the coronavirus outbreak in the UK.
Of those that have closed, 36% are not sure whether they will ever reopen again.
For those small businesses paying a mortgage or lease on their premises, over a quarter (27%) have failed to make, or faced severe difficulties in making, rent or mortgage repayments as a result of the pandemic’s economic impacts.
A similar proportion, 21%, have had to shelve product development plans.
Among exporters, 17% say they have had to either reduce or cancel international sales.
In response to the strain being placed on them, more than one in three (37%) small employers are considering, or have already made, redundancies.
Seven in ten (69%) small employers in the West Midlands have furloughed staff to aid the survival of their business, illustrating the extent to which the Job Retention Scheme has protected the livelihoods of millions as economic activity has slumped.
As initial efforts are made to switch the economy back on, three-quarters of these businesses say the ability to partially furlough workers would benefit them. Of these, almost half (49%) say they want to bring staff back gradually, and one in three (31%) in the West Midlands say it would keep their business viable.
Rich Bishop, FSB West Midlands regional chair, said: “The Government has stepped-up with a huge range of support for millions of small businesses and sole traders, from income support schemes, to cash grants, to help with accessing finance and business rates breaks.
“Policymakers now need to realise that the economy will not go from zero to a hundred overnight once we’re into the recovery phase. The crucial support that’s on offer needs to be kept under review and adapted to reflect the new normal as we chart a course back to economic recovery.
“Extending the Job Retention Scheme and allowing small firms to furlough staff on a part-time basis will protect thousands of livelihoods over the months ahead.
“We await further detail on the contributions that will be required of small employers after July. We need to ensure that those obligations are affordable for the many businesses that have had no revenue coming in for months now, but still have fixed overheads to worry about.”
The new study also highlights those within the small business and self-employed community that have struggled to access government-initiated support.
Among small firms that pay business rates, one in seven (14%) say their landlord charges them for rent and business rates in a single recurring bill, meaning they risk missing out on cash grants linked to the payment of rates.
Close to one in ten (8%) of business owners in the West Midlands have applied for universal credit, with close to a third (29%) having their applications rejected.
Meanwhile, of those small business owners that say they are not using the Self-Employed Income Support Scheme, the majority (68%), say this is because they are directors of limited companies.
The FSB continues to make the case for support for those excluded from existing grant schemes, including by calling for increased access to improved local hardship funds.
Rich Bishop concluded: “The support measures that we’ve secured are helping the vast majority, but they’re not helping absolutely everyone. We’re hearing from business owners who are falling through the cracks and taking their stories straight to the top of government.
“Policymakers need to be in listening mode and prepared to help the most vulnerable over the challenging months ahead. No one should be left behind.”