Results from the third British Chambers of Commerce (BCC) Coronavirus Business Impact Tracker reveal that the majority of businesses responding to the survey have now furloughed a proportion of their workforce and are awaiting funds from the Government’s Job Retention Scheme to enable them to pay staff.
The business organisation’s weekly tracker poll, which serves as a barometer of the pandemic’s impact on businesses and the effectiveness of Government support measures, received 701 responses and is the largest independent survey of its kind in the UK. The third tranche of polling was conducted from April 8-10.
Businesses furloughing employees
Last week’s tracker found that 71% of respondents said they intended to furlough staff at some point. This week, the tracker confirms that 66% of firms had now furloughed a proportion of their staff in anticipation of the Coronavirus Job Retention Scheme going live and making payments. 31% said they have furloughed between 75 and 100% of their workforce.
Last week HMRC confirmed the scheme would be open to applications during the week of April 20, leaving only a short time for funds to start to reach cash-strapped businesses before April’s payroll is processed.
Cash flow concerns
Business’ cash flow, an important indicator of overall economic health, remains an urgent concern with more than half of firms reporting cash in reserve of three months or less. The percentage of firms reporting less than a month’s worth of cash in reserve (17%) and 1 to 3 months’ cash in reserve (36%) has remained broadly unchanged week-to-week, but remains concerningly high.
The percentage of firms reporting no cash in reserve remained at 6% compared to last week, as did the proportion of firms with 12 months’ cash in reserve (also 6%).
Access to Government support schemes
The slow start in firms successfully accessing government support schemes has continued. 2% of respondents reported they had successfully accessed the CBILS this week (double last week’s 1% figure), with 9% of respondents unsuccessful. Of those who were unsuccessful, slow or no response from lenders was cited as the main reason. This suggests firms could still be having difficulty accessing the support through banks, despite the announcements on April 2 designed to simplify and speed up the CBILS process.
15% of respondents said they had successfully accessed grants for small businesses, a rise of 7% on the previous week. 12% of respondents said they were unsuccessful in accessing these grants. The overwhelming majority of those who were unsuccessful reported they did not meet the criteria.
Commenting on the results, BCC director general Dr Adam Marshall said: “Businesses on the frontline need cash to start flowing from support schemes fast. With April’s payday coming up, we are fast approaching a crunch point, and both the furlough scheme and CBILS facilities need to be accelerated.
“While we’ve seen a high number of firms furloughing staff in anticipation of the Job Retention Scheme coming online, it is still unclear whether they will start receiving funds before their payroll date, which could exacerbate the cash crisis many businesses are facing.
“It is essential that the Job Retention Scheme makes payments to businesses as soon as possible. Any delay could mean more livelihoods under threat, more business failures, and more hardship in our communities.”