Local small businesses falling through the government support net

May 06, 2020

Despite promises of financial support from the government due to Coronavirus, some local businesses are in danger of closing down as they fall outside the criteria for support.

Back December Gail Baker, owner of local business Hydropaws, a professional, multi-purpose dog care centre, took the decision to move into larger premises. Business was good and there was a growing interest in the business. “I’ve been self-employed for many years and started Hydropaws in Morecambe four years ago, I am passionate about what we do and wanted to create a centre of excellence that dog owners could trust in all aspects of their dog's care.” said Gail.

The decision to expand the business meant that they could offer more services to dog owners in the district and respond to increasing requests for treatment and training. Expanding the business obviously brought with it increased costs in rent and running expenses. “Both our rent and electricity and other running costs went up dramatically.” Gail explained. “ It was quite a jump but we felt the business was doing well and it was manageable. Then Coronavirus struck and the lockdown effectively closed us down, as it did many other local businesses.”

Gail felt that they could survive as the government had promised support to small businesses. It was just a case of waiting it out and using the financial support offered to help keep the essential bills being paid. Unfortunately for Gail and many other local business owners in the district the size and type of their business means they have fallen outside the scope of government financial support.

“We didn’t qualify for the £10,000 small business rate relief and as we are not in the retail hospitality or leisure sector, we don’t qualify for any government support set aside for that industry. We’ve been left high and dry. I know of some business that are still operating and whose owners have said they are still busy who have been getting financial support as well. It seems a little unfair.” Gail said.

 When asked about the announcement at the end of last week by Lancaster City Council of a £1million local business support fund, Gail said. “We approached the council for support to be told that funding is at the council’s discretion and at the moment the priority for the fund is charities, bed and breakfasts and market traders. Whilst each of these sectors is important to our local economy, it leaves the rest of us with nowhere to go to find support. Banks seem apprehensive in offering loans, even though the government has requested they do so. Like many others my business is struggling through no fault of my own. At the start of this virus and lockdown the government promised to help businesses survive, yet my business slips through the gaps and we get no help what so ever. I have worked so hard to get my business to where it is and to lose it would be devastating. I know I’m not alone in this, there are many businesses in the same position. We’ve tried to keep the business afloat by offering some online services, but the nature of what we do means we need to see our customers personally.”

Another self-employed small business owner in Lancaster who didn’t wish to be named said.  “I run my business from home so I’m not eligible for any support from anywhere it seems. I’m told that I might get something through the HMRC scheme but that might not come until July. So far I’ve lost three months income and my higher income earning months over the summer are now also pretty much written off.  There must be lots of people and small businesses in the same position as me. I don’t think we’re going to survive this?”

When asked about the priorities for the £1million business support fund, a spokesperson for Lancaster City Council said. “We are following the guidance and priorities set out by national government. In the last few days a further pot of money has been released by government and we are waiting to see what our percentage of that pot is. Once we know we can begin to look further at how we support small businesses in our area.”

Last Thursday (April 30) the city council’s Cabinet signed off on a package of new measures to provide help, advice and support to businesses in the Lancaster district. It will mean support is available for any business that needs advice on how to combat the pressures they may have found themselves under during the coronavirus pandemic.

Councillor Dr Erica Lewis, leader of Lancaster City Council, said: “Supporting local businesses has been a focus of the council’s work throughout the pandemic. As the coronavirus lock down took effect, council resources were reallocated to strengthen our economic development team so they could deal with the thousands of enquiries that were to come.

“To support businesses, the council made advances of the government’s grants available while we waited for the money to arrive from the government. We also took steps to make sure we had collected the necessary information from them so we could pay out the grants as quickly as possible, and to date have paid out £23.7 million to more than 2,000 businesses.

“We were, however, troubled by the number of businesses missing out on government support for one reason or another. We wanted to design a support package that would not only focus on those otherwise missing out on help, but which would also look towards the long-term sustainability of businesses and our local economy. In keeping with the council’s focus on partnership working and strengthening the local economy we will be looking for local organisations to contribute their expertise to the scheme we are building, and I’d like to thank them all in advance for their support.”

The funding available is aimed primarily at small (less than 50 employees) businesses with on-going fixed property-related costs.