Economy Secretary Fiona Hyslop has outlined details of a £40 million fund to help businesses affected by temporary restrictions to slow the spread of coronavirus (COVID-19).
The COVID-19 Restrictions Fund will provide one-off grants of up to £3,000, depending on rateable value, to bars, restaurants and other businesses required to close by regulations.
A hardship fund with grants of up to £1,500 will support some businesses that remain open but are directly impacted by the restrictions, including those in the direct supply chains of firms that must close from tonight.
In addition, up to £9 million of funding will help with the costs of re-furloughing staff by supporting the 20% salary contribution required by the UK Government.
A discretionary fund of up to £11 million will help businesses that need support but don’t fall into the above categories. This will, for example, support soft play centres that have been unable to re-open this month.
The plan has been developed following discussions with business groups, trades unions and local authorities.
Ms Hyslop said: “The temporary restrictions announced by the First Minister are absolutely essential if we are to prevent a return to the dangerous level of infections that we experienced earlier this year.
“It is a difficult balance and we do not underestimate the challenge that these new measures present for businesses – particularly those in the hospitality sector.
“We have developed a funding plan which will help to protect jobs over the coming fortnight and I encourage business owners to apply for support.
“We are also committed to helping businesses meet their contribution to furlough costs, where staff have to be re-furloughed. We have increased the size of the grant available and are urgently identifying a mechanism to deliver additional support on top of that.
“While I welcome the UK Government’s plans to adapt the job retention scheme and the associated consequential funding, we still require clarity on what the Chancellor’s announcement will mean for Scotland.
“This situation further underlines the need for us to have the financial flexibility which would help us to rebuild our economy.”
Information for businesses is available at findbusinesssupport.gov.scot
Grants will be distributed by local authorities. Up to £2,000 will be payable to businesses with a rateable value of up to £51,000 that are required to close by law, for those with a rateable value of £51,001 or above the grant will be £3,000.
Ms Hislop’s announcement followed the Chancellor of the Exchequer’s statement:
Job Support Scheme expanded to firms required to close due to Covid Restrictions
The UK government’s Job Support Scheme (JSS) will be expanded to protect jobs and support businesses required to close their doors as a result of coronavirus restrictions, the Chancellor announced today (Friday 9 October).
- Job Support Scheme will be expanded to support businesses across the UK required to close their premises due to coronavirus restrictions
- government will pay two thirds of employees’ salaries to protect jobs over the coming months
- cash grants for businesses required to close in local lockdowns also increased to up to £3,000 per month
Under the expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work – protecting jobs and enabling businesses to reopen quickly once restrictions are lifted.
The government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
Chancellor of the Exchequer, Rishi Sunak, said: “Throughout the crisis the driving force of our economic policy has not changed.
“I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.
“The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.”
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions, a very small proportion of overall employment costs. It is estimated that around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
The scheme will begin on 1 November and will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via a HMRC claims service that will be available from early December. Employees of firms that have been legally closed in the period before 1 November are eligible for the CJRS.
The scheme is UK wide and the UK Government will work with the devolved administrations to ensure the scheme operates effectively across all four nations.
This comes alongside intensive engagement with local leaders today on potential measures are coming in their areas.
In addition to expansion of the JSS, the government is increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs. These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously. This could benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs, bowling alleys and many more.
The devolved administrations in Scotland, Wales and Northern Ireland will benefit from a £1.3 billion increase to their guaranteed funding for 2020-21 – allowing them to continue their response to Covid-19 including through similar measures if they wish.
These measures will sit alongside the original JSS – which is designed to support businesses that are facing low demand over the winter months – and the £1,000 Job Retention Bonus (JRB) which encourages employers to keep staff on payroll.
They build on the UK government’s wider package of unprecedented measures to help protect, create and support jobs through the pandemic, to ensure that nobody is left without hope or opportunity.
Welcoming the move, Scottish Secretary Alister Jack said: “The extension of the Chancellor’s Job Support Scheme is welcome news for businesses across Scotland, providing a vital safety net for companies which are asked to close temporarily.
“From the very start of the pandemic, the UK Government has focussed on stopping the spread of coronavirus and keeping people safe, while also doing everything we can to protect the economy.
“The unprecedented package of measures we have put in place to support all parts of the country shows the clear benefits for Scotland being part of a strong United Kingdom.”
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