1st May 2020
Scottish businesses are facing a catastrophic decline in cashflow due to the impact of the Covid-19 pandemic and are coming up against barriers in government support, a new survey has found.
A snap survey of just over 350 companies in Scotland undertaken by the Scottish Chambers of Commerce (SCC) has found that without access to support, 48% of these companies expect they will run out of cash in three months’ time which is how long stringent measures to mitigate the spread of
the virus are expected to be in place. Of these, 13% say they have less than a month before cash runs out.
Over three-fifths of firms (64%) who responded believe that there are gaps in the current business support measures offered by government. Half of firms surveyed have already furloughed – or intend to – furlough at least half of their workforce.
Commenting on the results, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce said:
“Both the UK and Scottish Government have moved quickly to staunch this catastrophic decline but what businesses are saying is it’s still not enough. If we are to prevent the Scottish economy from being damaged beyond recognition, businesses need cash in the bank now to be fit for when the country is able to start returning to day to day activities.
“Businesses are also looking for an economic recovery plan in Scotland that avoids a restart-stop scenario. We need clarity so we can plan ahead while still protecting the health of people across Scotland. Many are also concerned that Scotland’s recovery schedule doesn’t lag too far behind that in England, with the potential of creating a competitive disadvantage in Scotland.
“As we begin to look towards what the economic recovery phase will look like and what it will mean for businesses and jobs across the country, we must always remember the economy is about the people within it who will power us out of this crisis.
“Businesses are playing their part in saving lives and protecting the NHS, but we must also secure the economic future of our country and the livelihoods of those who work within it.’’
- Cashflow: Almost half of companies (48%) say current cashflow levels will only cover them for a period of up to or less than 3 months
- Barriers to support: Over three-fifths of firms (64%) believe that there are gaps in the current business support measures offered by government
- Lack of uptake on the CBILS: Only 17% of respondents have used it or are planning to use it
- High uptake on the CJRS: Over half of responses have already furloughed – or intend to furlough at least half of their workforce