Private sector could give out stuttering business grants

Business leaders have said that the private sector is ready to step in amid pleas for announcements made by the Scottish Government over funding to run parallel with applications being open – rather than firms facing lengthy waits before being able to access the support they are entitled to.

The warnings come as the latest statistics show that the Scottish Government has paid out less than one tenth of funding it has promised to businesses – delivering just £55 million of the £715 million announced by ministers.

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More than 4,000 businesses are waiting for applications to be processed for the Strategic Framework Business Fund while only seven of the 30 funding pots have been launched.

Cosla, the umbrella group for Scottish councils, has warned that “the way in which Covid funding is being provided by Scottish Government presents challenges and restrictions “.

The organisation has pointed to 30 different pots of funding that it stresses “all come with an additional administrative burden” and “reduces councils’s ability to respond to local needs and demands”.

Ms Martin has told MSPs that “local authorities are doing a lot of the heavy lifting in terms of what they are required to do and how quickly they are required to do it” to process applications.

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She added: “We are working with government right now and with local government to think is there something else we could put in place quickly to help.

“Can we actually even look at a private sector model – use something that’s going to allow us to scale up very, very quickly."

Ms Martin added that the public sector needs to improve its “ability to turn things around quickly” and “make it easy for businesses to apply for something and get it out the door” in order for processes to be improved.

She added: “Public agencies and local government, in particular, have swung behind the enormous challenge of getting much needed money out to businesses at an unprecedented scale and pace. Tens of millions have already been paid out.

“At Scottish Enterprise, we’ve been working with local authorities and other partners to ensure support gets to companies as quickly and efficiently as possible. Part of this work includes sharing lessons learned from our experience of delivering earlier Covid response funds.”

SNP MSP Joan McAlpine has also warned that “in some cases, local authorities haven’t set up the discretionary fund yet”, despite being announced by the Scottish Government in October.

She added: “Are local authorities over-burdened? Should somebody else be administering these funds if local authorities aren’t getting the money out?”

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The Scottish Government said it was for individual local authorities to determine how and when they use their discretionary fund allocation to meet local needs for business support.

Stuart Mackinnon, Scotland external affairs manager at the Federation of Small Businesses (FSB), said that around one fifth of the organisation’s members have not received any funding during the pandemic.

He added: “We would like to see the Scottish Government and the UK Government commit more money to seeing firms through this particular crisis. We have actually got to see the funds committed actually reaching the businesses.

“Over the course of this year, we have seen various administrative hiccups and log-jams with the grants.

Stuart Mackinnon

“The latest figures from the strategic fund show at least some money reaching businesses and they are for businesses forced to completely close – so we need to see that support continue.”

Mr Mackinnon said that the FSB want ministers to “set up a unit in government” to improve systems.

He added: “There’s an opportunity to have smarter approach.

“The grant support is insufficient but it might be the difference between success and failure for many, the longer that support is delayed in reaching businesses. Pace is an important element.

“What we need to see is resources focuses so expertise could be used to help administer the schemes a bit better.”

Mr Mackinnon said it is probably too late to rip up the current model but warned improvements are needed.

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He said: “We know there are a small number of people in local authorities who are currently administering one grant scheme and will immediately move onto others so it’s worth looking at how can we give them smarter systems.

“We are probably too far down the track with the current scheme to start over again. If we want to get grants out the door, we are probably wedded to the existing method.

“But there is an urgent need to make the whole system quicker and more user-friendly and use expertise from the entire public sector, including national government and the private sector if needed, to pick up the pace.”

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said urgency is needed by the Scottish Government, adding that the private sector is on hand to assist.

She said: “We recognise that governments and local authorities have faced great challenges since the beginning of the pandemic and have put in place large scale measures of support for businesses and employees.

Liz Cameron, chief executive of the Scottish Chambers of Commerce

“However, there has been an increasing concern and frustration over the pace at which business support is being distributed. There were several new cash grants announced by the Scottish Government in December but much of that money remains inaccessible to businesses who are growing ever more desperate for lifeline support.”

“Efforts to deliver business support must be stepped up quickly if businesses are to survive the rest of this dark winter. The private sector stands ready to support efforts to extend the capacity to deliver grants to businesses quickly.”

Scottish Conservative local government spokesperson, Annie Wells, has called for the Scottish Government to take the extra pressure off local councils and speed up the delivery of crucial grants.

She said: “The SNP have spent years cutting council budgets yet they still expect them to deliver the same level of service.

Annie Wells

“SNP ministers have announced a whole host of funding streams but simply haven’t given local authorities the resources required in order to get them out to individuals and businesses desperate for support.

“As usual they are passing the buck rather than putting the effort in to get the money out the door.

“It’s unacceptable that SNP Ministers have now created a situation where councils are so overburdened that they can’t keep up pace with the schemes announced.”

A Scottish Government spokesperson said: “We are incredibly grateful to local authorities for the power of work they have done and continue to do to help us get lifeline support to as many businesses as possible during this pandemic.

“The latest figures for our Strategic Framework Business Fund show that in November and December, local authorities processed 13,462 business support grants totalling £31.4 million.

“The December payments from this fund was made over a week early and local authorities are on track to make the January payment, despite a large increase in the number of new applications this month. To help meet this demand we have provided an additional £12 million to help local authorities recruit staff and speed up payments.

“We will continue to work closely with local authorities to maximise the resources that are available to us to protect businesses and build a stronger recovery for Scotland.”