Results from the British Chambers of Commerce’s (BCC) first Covid-19 Business Impact Tracker paints a concerning, if unsurprising, picture for business communities affected by Coronavirus.
The poll points to a sharp and significant fall in domestic and overseas revenue for UK businesses. The majority of firms (62%) have three months’ cash in reserve or less while almost half of respondents (44%) expect to furlough at least 50% of workforce in the next week.
The BCC’s new tracker will serve as a barometer of business’ response to the Government’s measures and changes to business’ working practices over the next few months. It will also track how quickly new government interventions, introduced to deal with the real-world impact of this crisis, are getting to the businesses at the front line.
The first set of polling was conducted from March 25-27 with responses from over 600 businesses. It revealed that a majority of firms reported a significant decrease in their revenue from both the UK and overseas.
Cash flow concerns
Of most concern is the impact on business’s cash flow, an important indicator of overall economic health. 18% reported less than a month’s worth of cash in reserve, while 44% reported only 1 to 3 months’ worth of cash in reserve. Only 6% of respondents reported over 12 months’ worth of cash in reserve.
Businesses furloughing employees
Following the Government’s pledge to cover 80% of a furloughed employee’s salary up to £2.5k a month, 32% of respondents said that they were planning to furlough between 75%-100% of their workforce over the next week. More than a quarter of firms (26%) were not due to use the scheme in the next week.
Changing work practices
A majority of businesses have embraced the changes in working culture, with two thirds of respondents (66%) using remote working and half (50%) using videoconferencing.
However, 18% of businesses had closed operations temporarily and, although no respondents had yet closed business operations permanently, both figures are expected to rise over the coming weeks and months.
Awareness of Government support schemes
Encouragingly, most businesses reported awareness of the Government’s recent support schemes to help mitigate the impact of coronavirus.
- 61% of firms knew details of the business rates holiday for the retail, hospitality and leisure sector
- 59% of firms knew details of the Coronavirus Business Interruption Loan Scheme
- 57% of firms knew details of the Statutory Sick Pay refund
The percentage of firms actively in receipt of this support was low but this is expected to rise in the coming weeks following the Government’s official launch of the Coronavirus Business Interruption Loan Scheme and Job Retention Scheme on March 23.
Responding to the tracker results, BCC director general Dr Adam Marshall said: “The coronavirus pandemic has taken a heavy toll on business and economic activity across the UK.
“While businesses have welcomed the unprecedented size and scope of the government support packages, our findings highlight the urgent need for that support to reach businesses on the ground as soon as possible. The majority of firms cannot wait weeks or months for help to arrive.
“There’s no escaping the scale of the challenge UK businesses are facing, yet many are already finding ways to contribute to the national effort to tackle coronavirus. Chambers and their members are working together to play their part, including gathering unused PPE equipment from local businesses and delivering them to the NHS. I’ve no doubt we will see further examples of resilience and innovation – the hallmarks of the UK business community – in the coming weeks and months.”