Covid-19 Restrictions (Local Government Funding)

– in the Scottish Parliament at on 3 November 2020.

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Photo of Sarah Boyack Sarah Boyack Labour

2. To ask the Scottish Government whether the new five-tier restrictions come with greater funding for local government in areas where more businesses must close. (S5T-02504)

Photo of Kate Forbes Kate Forbes Scottish National Party

The Scottish Government will resource in full the business support approach that is set out in the strategic framework.

Photo of Sarah Boyack Sarah Boyack Labour

Can the cabinet secretary give more clarity on that issue? Local authorities are aware of businesses that now face a precipice because even if they are allowed to open, they might need to operate restrictions that mean that they cannot survive.

It has been heartbreaking to hear of small local businesses that have used up their savings to keep afloat in the past few months. Members have already talked about hospitality. Given local authorities’ success in supporting businesses through the first wave, can the cabinet secretary clarify what support is available from the Scottish Government that could be distributed through councils once again?

Photo of Kate Forbes Kate Forbes Scottish National Party

At the outset, I want to say just how grateful I am to local authorities up and down the country and how much I appreciate their work. Working at the heart of each local authority are officials, employees and staff members who, in many cases, have gone above and beyond the call of duty to ensure that grants are processed quickly and to provide that support to businesses, and who have often worked beyond their allocated work, as it were, to make that happen.

On the business support that is available, from 2 November, grants are available for every four-week period of restrictions. In the strategic framework, which was announced last week, I outlined that grants of more than £2,000 or £3,000, depending on rateable value, will be available for businesses that are required to close by law, and that hardship grants of £1,400 or £2,100, depending again on rateable value, will be available for businesses that remain open but are directly impacted by restrictions. Those grants will be provided regardless of protection level. More information can be found on the Scottish Government’s website, which is, if I remember correctly, findbusinesssupport.gov.scot.

Photo of Sarah Boyack Sarah Boyack Labour

I very much welcome that information from the cabinet secretary, which I will be sure to share with constituents.

Infrastructure projects will be vital in kick-starting our local economies. Will the cabinet secretary clarify when and how much funding will be available from the £275 million town centre fund to enable local authorities to start planning ahead and to work with local companies? Letting local authorities get going with that investment is crucial to keeping our town centres alive.

Photo of Kate Forbes Kate Forbes Scottish National Party

When it comes to providing support to local government, the £230 million that we made available in June included additional funding for regeneration and the town centre capital fund. That will allow local authorities to plan ahead when it comes to infrastructure. I quite agree with Sarah Boyack that infrastructure will be key to providing jobs and revitalising local government. The detail and the breakdown of that funding, in terms of split by local authority, is also online.

Photo of Willie Coffey Willie Coffey Scottish National Party

The Chancellor of the Exchequer has committed to open-ended support for businesses in England, and is essentially writing them a blank cheque. Has the Treasury provided any assurances that funding for business support in Scotland will be similarly open ended?

Photo of Kate Forbes Kate Forbes Scottish National Party

That is a very important question. If businesses in, let us say, Liverpool are required to close, the Treasury will continue to provide financial support in the form of grants to those businesses. In Scotland, of course, we are given Barnett funding, but it is very challenging to forecast the costs when we do not know, right now, how many businesses will need grant support or for how long.

It is important that we can continue to provide support, which is why I have been asking for two things. One is a breakdown of the £700 million of guaranteed consequentials, to understand what portions of it are for health, transport and business support. The second is the reassurance that if businesses need more support than can be provided within that £700 million, the UK Government will be willing to step in so that the Scottish Government can provide that support to businesses.

Photo of Annie Wells Annie Wells Conservative

In the past week, the Scottish National Party Government has already had to U-turn on contingency funding for nightclubs, and there is still some uncertainty about support for soft-play centres. What will the cabinet secretary and her colleagues do to prevent that needless uncertainty in the future, to give more clarity and guidance to our struggling local authorities and to ensure that much-needed support gets out to businesses as quickly and efficiently as possible?

Photo of Kate Forbes Kate Forbes Scottish National Party

It is quite remarkable that a Scottish Conservative MSP has just asked me about U-turns, business support and uncertainty.

On the support that is available to businesses, we announced several weeks ago that there would be £11 million of contingency funding. That allows a flexible approach to providing support to businesses that have not been able to open yet, or have seen much-reduced trade. They do not need to apply for the contingency funding. Local authorities will contact soft-play businesses and nightclubs directly to begin the process of providing them with support—although they, too, would of course value additional clarity and certainty from the UK Government, whose U-turn thus far has been quite shambolic.

Photo of Alex Cole-Hamilton Alex Cole-Hamilton Liberal Democrat

Outdoor events producers have suffered more than most businesses as a result of the pandemic restrictions, but they have started to adapt and to create Covid-safe events. The organisation 21CC, which is based in my constituency, was due to have a safe drive-in fireworks display in Errol at a cost of several tens of thousands of pounds to the organisation, but it now has to cancel that event because of the cross-region tier restrictions on travel. Given that such organisations will not have been insured for Covid-related disruption, will the cabinet secretary consider repurposing part of the newly announced events recovery fund to make good any losses for outdoor events producers such as 21CC?

Photo of Kate Forbes Kate Forbes Scottish National Party

We recognise the huge impact on the events sector, which is why we made £10 million available for it as part of the culture, creative and heritage consequential funding. A number of other support schemes are also available.

Alex Cole-Hamilton has made a really important point. With the funding that we have been given, it is very challenging for us to ensure that all sectors and all businesses see their lost income being replaced. That is why, in providing support, we are trying to make the funding envelope as wide as possible so that there is support available for the events sector and culture organisations. However, we appreciate that that will not be sufficient to make up for all the lost income, so we are keen to get any consequential funding that is available to us out the door as quickly as possible in order to provide support to businesses and ensure that jobs are retained.

Photo of Shona Robison Shona Robison Scottish National Party

What discussions has the Scottish Government had with local authorities and banks about the eligibility criteria for the Covid-19 restrictions fund, which requires a business bank account to pay funds into if an application is successful, and about the issues that that is causing for a number of businesses in my constituency?

Photo of Kate Forbes Kate Forbes Scottish National Party

On engagement, we have worked closely with partners in local government to get the funds up and running quickly. The requirement for a business bank account is to help to manage the risk of fraudulent claims.

I am aware that there has been an issue with banks not opening new business bank accounts because of the volume of UK Government loan scheme applications that have been received. That has put considerable strain on account-opening resources. Fiona Hyslop has raised that issue directly with the banks at the banking and economy forum, and with Scottish Financial Enterprise.

I understand that many banks are now opening new accounts for larger businesses and existing customers who are establishing new businesses. I agree that that falls some distance short of the ideal situation, so we will continue to press the banking industry to ensure that business owners are not adversely affected by that situation and can benefit from the new scheme.

Photo of Alex Rowley Alex Rowley Labour

At the weekend, I heard a number of UK Government ministers talking about the levels of funding that they are putting into local government in different ways. Labour very much supports the call for details of the funding that is coming through Barnett consequentials, and we will work with the Government on that.

However, on the different levels in Scotland, I was contacted at the weekend by a number of companies and pub owners in Fife who said that they are in level 2, but would prefer to be in level 3 because, realistically, they are unable to function. If a bar says that it is simply not feasible for it to continue to be open, will it get the same support?

Photo of Kate Forbes Kate Forbes Scottish National Party

I thank Alex Rowley for that question, which was raised in advance of the protection levels coming into force. That issue was somewhat resolved by furlough being extended, because the big challenge for pubs was that, even if they were allowed to open in level 2, a ban on selling alcohol would mean that it would clearly not be viable for them to do so. There was a risk that they would not be able to access the job support scheme if they were closed, which is more generous than the support under the scheme if they were open.

In discussion with businesses and business organisations, it was concluded that it would be easier to mandate closure rather than to allow businesses to open with less financial support. We now have a window of a month to make sure that the regulations are right, because furlough is in place and the job support scheme has not come into operation, but we will need to ensure that pubs and other businesses are able to access maximum support. Of course, that will not even be a topic of consideration if the furlough scheme is extended for Scottish businesses, as the Prime Minister said yesterday it would be.