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Portfolio Questions: Finance

The following Portfolio Questions were tabled in Parliament yesterday, 14th January 2021:

  • Covid-19 (Targeted Business Support)

o    1. Jamie Greene (West Scotland) (Con): 

To ask the Scottish Government, further to the Cabinet Secretary for Finance’s announcement on 9 December, how many businesses have received support from the £185 million funding package. (S5O-04905)

o    The Cabinet Secretary for Finance (Kate Forbes): 

For context, I am sure that Jamie Greene knows this, but we have allocated more than £3 billion to businesses since the beginning of the pandemic. That is more than a third of overall Covid spend, with the vast majority having been paid out to businesses already.

Things have changed, with the changes to the current restrictions on business, so right now just under 50,000 businesses can apply to the open strategic framework business fund to receive their recurring four-weekly grants, which will be paid in January. Those are administered by local authorities.

The December payment was made more than a week early, before Christmas, and we are on track to make the January payment on time. I remind members that all eligible businesses that have been forced to close can apply right now. That is clearly a vast swathe of the business community. Most of them will also a get a top-up of up to £25,000, which will be paid in January and is, obviously, more generous than the top-up that was announced in the December statement. Businesses can apply for that grant right now, but in order to reduce the administrative burden for businesses and local authorities, we have streamlined the schemes, so both payments will be made in one go in January.

o    Jamie Greene: 

I thank the cabinet secretary for her lengthy response, which unfortunately did not answer my question. How much of the £185 million that was announced on 9 January has actually been paid out to businesses? We are halfway through January and businesses are going to the wall. Jobs are being lost every day. It is not good enough to make top-line promises without delivering quickly enough on the ground.

I again ask the cabinet secretary to explain how much of the fund has been physically delivered to real businesses, in cash, on the ground. If the cabinet secretary does not know the answer to that, will she commit to researching and gathering the data from local authorities, and to publishing and reporting it every week so that we know that businesses are getting the money that is announced after top-level announcements?

o    Kate Forbes: 

I thank Jamie Greene and humbly suggest that he should also do research when it comes to gathering the facts because, right now, businesses require information rather than misinformation.

Data on payments that were made in December will be published imminently. On businesses that can receive support, I told the member in my first answer that just under 50,000 businesses can currently apply to the open strategic framework business fund to receive four-weekly recurring grants, which will be paid in January. On our track record, local authorities paid out the grant in December a week early.

The top-up that was announced on Monday means that pubs and restaurants in Scotland that have a rateable value of up to £15,000—in other words, small businesses—will receive more than £2,500 more this month than their equivalents in England will receive under the Tories. Local authorities are working extremely hard to distribute the grants, which will be paid in January as we promised. We recognise the huge pressure on businesses right now.

o    Colin Beattie (Midlothian North and Musselburgh) (SNP): 

As part of the £185 million package, the cabinet secretary announced that hospitality businesses will receive a very welcome one-off payment of between £2,000 and £3,000. Can she provide detail on how many businesses in Scotland it is expected will be eligible for those payments?

o    Kate Forbes: 

As Colin Beattie rightly said, in December we announced a one-off payment. For the hospitality sector, that has been considerably increased to up to £25,000 for larger businesses. That means that a property such as a pub or a restaurant with a rateable value of more than £51,000 will receive £16,000 more than its equivalent south of the border.

We expect tens of thousands of business premises to be eligible for that top-up, which covers retail, hospitality and leisure. As eligibility is aligned with the strategic framework, businesses need to make only one application. They will receive the four-weekly recurring grant as well as the top-up. In my previous answer, I indicated that a majority of the businesses that apply will receive that top-up.

o    Jackie Baillie (Dumbarton) (Lab): 

The additional top-up for hospitality, retail and leisure is, of course, very welcome. Unfortunately, the self-catering sector appears to have been missed out. Such businesses are also hospitality businesses. There are hundreds of self-catering businesses in the Loch Lomond and the Trossachs national park area, and there are thousands throughout Scotland, including in the cabinet secretary’s constituency. Those businesses feel that they are being treated very unfairly. Why are there no similar one-off grants for that sector, and will the cabinet secretary urgently review the position?

o    Kate Forbes: 

I will correct the record on one point that Jackie Baillie made. She is quite right to ask about self-catering properties, but I stress that they are already eligible for grants through the strategic framework business fund. All non-domestic-rated businesses that are required by law to close—that includes self-catering businesses in level 4 areas—are eligible. We have not excluded them.

On the member’s question about one-off payments, the self-catering sector is one of the very few that have a bespoke sectoral scheme. Work is at an advanced stage on designing that and making payments. That will be the second sectoral scheme for self-catering businesses; the previous one was launched last summer. All members know from our mailbags that many sectors that would like sectoral schemes do not have that kind of specific support.

I understand the concerns. We have announced a self-catering business specific grant, and we will honour the commitment to deliver it.

  • Barnett Consequentials 2020-21 (Allocation)

o    2. Liam Kerr (North East Scotland) (Con): 

To ask the Scottish Government how much of the Barnett consequentials announced for 2020-21 it has formally allocated. (S5O-04906)

o    The Cabinet Secretary for Finance (Kate Forbes): 

To date, £8.2 billion of consequentials have been formally allocated via the summer and autumn budget revisions, as I indicated in my letter of 8 December to the Finance and Constitution Committee. Since then—just hours before Christmas—a further £400 million of funding has been provided in consequentials. That funding will support a range of costs and has already been distributed to cover support for further grants that have been made under the strategic framework and the top-up business grants that were announced on 11January. Those funds are demand led, so—as Liam Kerr will appreciate—sufficient funding must be allocated to cover that demand until the end of the financial year. Final allocations will be set out in the spring budget revision.

o    Liam Kerr: 

I thank the cabinet secretary for that answer, but businesses in Aberdeen and the north-east are on their knees and are desperate to receive the support that the cabinet secretary has promised. Data that were published yesterday show that only seven out of 30 funds have even been launched, and that only £6 million of the new funding that was announced in October has actually reached businesses. Without that money, businesses cannot survive and jobs will be lost.

As the cabinet secretary pointed out, the Scottish National Party has got the money from the UK Government, so what is causing the delay? When will the SNP get its act together and give businesses in the north-east the funds that they have been promised?

o    Kate Forbes: 

Liam Kerr says that data have been published. He might find that what was published was actually a Conservative press release and not data, because those figures are not accurate.

With regard to support for businesses right now, I remind him of what I said to his colleague Jamie Greene, and suggest that the Conservatives, rather than misleading businesses, start to distribute information and facts. That information includes the fact that the strategic framework, which is the main focus for businesses—the main fund that is available right now—is live and open, and payments will be made on a four-weekly basis. The next payment date is at the end of January—if payment in December is anything to go by, we will meet the deadline and might, in fact, try to beat it.

o    Ruth Maguire (Cunninghame South) (SNP): 

The UK Government recently pledged an additional £4.6 billion to support business across the UK, which included an additional £375 million for Scotland. However, I understand that the UK Government has subsequently backtracked on that commitment and has suggested that Scotland will receive no additional funding at all. Can the cabinet secretary advise members on what the Scottish Government’s latest engagement has been with the UK Government regarding consequentials arising from that announcement?

o    Kate Forbes: 

In the immediate aftermath of that announced change, I wrote to the UK Government to express my disappointment that the announcement of funding for businesses in England did not, despite the initial indications, generate new funding. That is a blow to Scottish businesses, many of which were confused by the announcements.

I had hoped, considering that the Scottish Tories seem to be so certain about what funding is available to the Scottish Government, that that situation might have reminded them of how fluid the situation is, and of how complicated it is in terms of the funding that is allocated to the Scottish Government. We do not wait for the UK Government to get its act together—we make announcements and get funding out the door. That is precisely what we are doing with the strategic framework business fund, from which the next payment will be made at the end of January.

  • Level 4 Restrictions (Business Support)

o    3. Clare Adamson (Motherwell and Wishaw) (SNP): 

To ask the Scottish Government how much it has allocated to provide financial support for businesses in the Motherwell and Wishaw constituency that have been impacted by level 4 Covid-19 restrictions. (S5O-04907)

o    The Cabinet Secretary for Finance (Kate Forbes): 

I recognise that businesses in the Motherwell and Wishaw constituency have been badly hit by the level 4 Covid restrictions and will, as are businesses across the country, be struggling.

Since the beginning of the pandemic, we have allocated almost £3 billion in support for businesses. Grants are provided to local authorities, which can distribute them to businesses in their area on a demand-led basis. Those funds are live and are available for application right now. The details of any funding that is available through local authorities is available on the Scottish Government website.

o    Clare Adamson: 

We know that a number of businesses have, for different reasons, been eligible for the various business support schemes that have been implemented since the start of the pandemic. The Scottish Government has stepped in and announced the local authority discretionary scheme, which will allow councils to be flexible in awarding financial support. What guidance has been given to councils in the formulation of that scheme? Can the cabinet secretary give further details on when and how businesses in my constituency may expect to benefit from it?

o    Kate Forbes: 

That is an important question. We recognise that there are gaps in UK Government schemes and, indeed, in our own schemes, and we recognise the challenges that have been faced by businesses that feel that they have been excluded from the beginning. One of the ways in which we have tried to reach them has been by providing discretionary funding to local authorities. I emphasise that that funding is discretionary in nature. Apart from our asking that the funding be spent on businesses, and that local authorities try to reach businesses that have not received funding to date, it is for local authorities to determine themselves how to distribute the funding, and they have been given guidance to that effect.

My officials have engaged with North Lanarkshire Council, and I understand that the details of the council’s discretionary scheme are being considered for approval by its enterprise and growth committee on 4 February, with the scheme being set to go live shortly thereafter. I am sure that the details of the scheme will be published on North Lanarkshire Council’s website.

o    The Deputy Presiding Officer: 

Question 4 has not been lodged.

  • Covid-19 (Business Support)

o    5. Rhoda Grant (Highlands and Islands) (Lab): 

To ask the Scottish Government how much it will allocate to support businesses experiencing difficulties due to Covid-19 that do not qualify for current schemes, or for which the assistance is inadequate to meet their needs. (S5O-04909)

o    The Cabinet Secretary for Finance (Kate Forbes): 

We will continue to do all that we can to support businesses. In addition to the announcement that I made this week about top-up payments in level 4, I have also announced the discretionary payment to island local authorities for businesses that are not required by law to close but are seeing reduced custom and trade. That additional, one-off funding will help island local authorities support businesses in their areas.

That is in addition to the funding that is already available through the £38 million discretionary fund, and it means that support for businesses in island communities can be brought up to the same level as that for businesses that are affected by level 4 restrictions on the mainland. As I said in my previous answer, that discretionary fund is truly discretionary, and it can reach those that have been excluded from current schemes.

o    Rhoda Grant: 

I am grateful for that. Many island businesses are impacted in exactly the same way as mainland businesses, because they depend on those areas for their trade.

Laundries and dry cleaners throughout Scotland have been told to remain open as well, because they are an essential service. However, the bulk of their trade is from hospitality, which means that their business has totally disappeared, but they do not qualify for assistance—nor do people who do not pay business rates but have high overheads, because they are not covered by support grants. Many other businesses do not receive support.

Will the cabinet secretary look at making support available to all viable businesses that will otherwise fail due to Covid-19?

o    Kate Forbes: 

Rhoda Grant highlights a number of very important points. The nature of our business community is complicated, so the schemes that are available have to be complex in nature in order to reach all businesses. Blanket schemes leave some out.

I have already answered the point about island communities, in saying that this week we announced funding for our island local authorities to help them provide support on a par with that provided to businesses in level 4 areas.

On the point about other businesses that Rhoda Grant has mentioned, there are two ways of resolving that. The first is discretionary funding for local authorities across Scotland, which, again, can be used at the discretion of local authorities. The second is sector-based grants, which we have moved into providing.

As I said in December, there is a risk of the landscape of grant support becoming quite complicated and complex. However, for the self-employed, businesses that do not owe domestic rates and businesses that are not registered in any way in Scotland but that need support—for example, businesses in the wedding sector, taxi drivers or mobile close-contact businesses such as beauticians—those sectoral schemes will reach them.

o    Murdo Fraser (Mid Scotland and Fife) (Con): 

I will raise the issue of self-catering accommodation providers, which was referred to earlier. The cabinet secretary had previously announced a £7 million scheme. When will that scheme be open for applications and, given that there are more than 16,000 registered self-catering properties in Scotland, and £7 million averages out at just over £400 each, is that sufficient to compensate the sector for the losses that it is suffering?

o    Kate Forbes: 

The one form of support that Murdo Fraser did not mention but which the self-catering sector is receiving is the on-going strategic framework business fund. Self-catering properties will receive grants of up to £3,000 in January and on top of that, as he mentioned, there is the sectoral scheme, which I announced in December would go live in January—that remains the intention. We are happy to take feedback, which I have heard loud and clear throughout these questions, but at the moment all self-catering properties in level 4 areas will get a grant of up to £3,000 in January and those in our island communities can receive support from the discretionary fund that has been given to our island local authorities.

o    Liam McArthur (Orkney Islands) (LD): 

Following my discussion with the finance secretary last week, I thank her for accepting the case for additional funding to allow businesses in level 3 areas such as Orkney access to the same support that is available to level 4 businesses from the strategic fund. However, is she able to allay fears among businesses in my constituency by confirming that island councils are free to use the top-up funding to support any business, including self-catering and bed and breakfasts, that would be eligible for support under the framework fund, and that the sector-specific funds that have been announced are in addition and are open to businesses in level 3 and level 4?

o    Kate Forbes: 

We have listened to feedback from people such as Liam McArthur and others in relation to ensuring that there is support available for the island communities. On the specific question, discretionary funding is available to local authorities, including island local authorities, to do whatever they want with as long as it is for businesses and it reaches those who had been excluded. My view is that the top-up funding should mean that businesses in island communities receive the same support at the same level as businesses in level 4 areas.



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