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FSB welcomes announcement of £5bn in new business grants

The Federation of Small Businesses has welcomed the government’s announcement of £5 billion of new grants to businesses as a much-needed lifeline, but also noted suppliers will likely need additional help.

FSB welcomes announcement of £5bn in new business grants
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Responding the latest spring budget announcement, FSB national chair Mike Cherry said it is an extremely challenging time for small businesses that have fought tooth and nail to stay afloat in the last year, so the FSB is pleased that its calls for further cash grant support will be heeded.

“This money – £5 billion for 700,000 businesses is a significant cash injection for non-essential retail, pubs, bars, restaurants, gyms, hairdressers and beauty salons,” Mr Cherry said.

“It will provide a much-needed lifeline, offering firms some reassurance as we look to put lockdowns behind us and focus on a vaccine-fuelled recovery.”

The government also announced £425 million for suppliers and others that have lost trade.

However, Mr Cherry said it’s disappointing that the amount of discretionary grant funding provided amounts to only 5 per cent of the total, as this will make it difficult for local authorities to reach many of those firms in the supply chain.

“Healthy supply chains are crucial to the economy, but many, particularly those in the event and hospitality sectors, have collapsed during the crisis,” he said.

“Over half of those on furlough are outside of retail, leisure and hospitality, so the amount of ARG funding may need to increase to match the real pain in the economy.

In addition, Mr Cherry said councils must also prioritise issuing their grants, citing government figures that show that only 13 per cent of existing funds given to them by the Treasury in mid-November had reached businesses by mid-January.

“They should be in a big race to stop supply chain businesses from going bust and have no excuse for any delays. They must increase the speed at which they get the money they do have out the door and into businesses’ bank accounts as we look to the future,” he said.

“We hope this announcement will be followed up at budget by further good news for those that have been excluded from income support throughout this crisis. We have presented fully worked-up policy solutions to government, alongside others.  Ministers now have the chance to choose which of these to go for.”

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