The first webinar was broadcast live on May 7th 2020 and the panel representatives were :-
Caroline Simpson – SMBC
Richard Mortimer – SMBC
Charlie Wood – SAS Daniels
Mike Lamont – RBS
Paul Whitney – Hallidays
Questions from the attendees to the panel and responses :-
Does Stockport First mean taking more of a Preston Model approach to procurement?
SMBC: We are developing our thinking for this campaign as part of our wider Local Economic Recovery planning. We have tracked that the Council already spent 43% (£142m) of its total procurement spend with Stockport based suppliers in 2018-19, and this was a significant increase on the 33% local spend in 2017-18, and we will be working hard to continue and improve this trend further. It’s early days but would say its about a wider call to our residents to support local businesses alongside procurement processes.
How many applications have RBS received and how many loans have been made on each scheme?
ML:As of 7th May, NatWest Group that includes RBS Commercial Banking had approved 44,000 Capital Repayment Holidays since mid-March; processed over 60,000 Bounce Back Loans (BBLs) within the first 48 hours of the Product being launched with loans already drawn within 72 hours and approved 10,600 Coronavirus Business Interruption Loan’s (CBILS) totalling £1.9bn representing 42% of all loans approved across the 65 participating banks authorised by the scheme.
When are we going to see support for businesses who do not have rate-able premises? We work online, so at the moment, we haven’t qualified for any of the business grants (but need one). We’re a multi-award winning company based in Stockport with 750k gross sales value last year, but we urgently need help.
PW:Currently some businesses are ‘missed’ with the grant assistance and this seems like one such business. The problem has been widely publicised from a fairness perspective. The following may assist if you haven’t already covered off these areas:
– Furloughing is of course available but I’m not sure of your staffing position. Furlough is available for Directors (assuming operating under a limited company) as long as the criteria is met but if paying minimum salary and dividends for tax efficiency, claim levels under the CJRS will be limited.
– If trading outside of a limited company, SEISS kicks in.
– Make sure you’ve gone line by line down the cash costs in your business to try to defer where possible, appreciating that you haven’t got many if any property related costs. Most lenders are open to deferral of capital costs on loans including asset finance as RBS suggested yesterday, supply chain are mainly flexible at the moment (everyone has to be where they can be).
– Deferral of HMRC liabilities is straight forward at the moment (VAT, CT, PAYE.NI) but all deferred costs need scheduling back in later so plan for this.
– Modelling as best you can is key, acknowledging that much will be guesswork but this can be flexed regularly as information becomes clearer. Keep the cashflows ‘live’ and change where new information becomes available.
– BBL’s and CBIL’s (ie government backed loans) are open to you, and even though this creates debt that you’ll need to pay back these are mostly fee free, attractive interest rates and the government meet your interest for year 1. Make sure you’ve enough of a cash buffer to carry you out of lockdown – but at the same time extra care is needed not to jump into a loan facility without understanding the serviceability impact down the line. Speak to your advisors.
– Extend the cashflow planning to personal if you’re struggling to pay yourselves for the above reasons, mortgage capital deferral, credit card/loan capital deferral etc.
– Plan as best you can for the ‘new normal’. It will clearly take some significant time for your sector to get back to how it was if it ever does, so much uncertainty at present in predicting the length of lockdown and what release will look like. What is certain is that the best way to predict your future is to create it, it’s not easy but think laterally and be bold!
With the ‘Stockport First’ initiative, are plans being put in place for SMBC procurement to favour businesses, and in particular SME’s that are located within the Borough?
SMBC: We have tracked that the Council already spent 43% (£142m) of its total procurement spend with Stockport based suppliers in 2018-19, and this was a significant increase on the 33% local spend in 2017-18, and we will be working hard to continue and improve this trend further. We are developing approaches to support SMEs to be better able to get into our supply chain, and we already have in place early payment terms for Stockport businesses, for example. We will continue to do more to support our SMEs
Re Economic Resilience Taskforce, what channels of communication have been used, how are they contacting businesses on furlough that (theoretically) should not have access to their business emails, and whose databases are they using to ensure information is shared equally across all Stockport businesses, charities etc?
The daily news updates are shared out across a number of partner networks to reach a wide audience of businesses, charities, including Sector 3, and social enterprises including: the Federation of Small Businesses, the Business Growth Hub, Greater Manchester Chamber of Commerce, Marketing Stockport, Stockport Economic Alliance, Stockport Council and Stockport’s Business Improvement District, Totally Stockport. These networks in turn are sharing the daily updates and headline news across social channels including twitter and Facebook where they are again shared for maximum coverage.
N.B. There may be some confusion here about the staff in a business being furloughed rather than the business itself.
Cash flow is quite obviously a key concern for all at this moment in time and my observation is that businesses are holding onto cash and stretching payment terms to suppliers. This can have a devastating impact on businesses who are not cash rich; what can we do within Stockport to encourage businesses to pay suppliers promptly?
SMBC: This is an important point and perhaps one that we can build into our local campaign to support local supply chains and helping with cashflow. We will look at how we can incorporate messaging and reminders about this important issue unto our comm’s.
PW: This is very true and we are seeing it across the client base. RBS also mentioned it on the webinar, businesses seem to be holding onto cash reserves right now. This behaviour whilst understandable will exacerbate the pressure points on exit from lockdown, large chunks of liabilities will be stacked up that do not ‘go away’. Many businesses are taking BBL’s and CBIL’s but are not then necessarily releasing monies to make standard supply chain payments. We are encouraging where possible our clients to ‘free up’ the cashflows where reserves are being built up but there does seem to be a blockage which needs to be addressed.
Public transport is a central pillar of business in order to have free movement of staff and to alleviate volume of cars on road network. How are we going to be able to safeguard employees safety on public transport especially as they are currently running on reduced capacity and seem reluctant to gear up?
SMBC: This is a crucial issue and Transport for Greater Manchester is awaiting further guidance from Government about safety measures and public transport. Balancing safety of the public with ensuring a provision of public transport that can allow a workforce to go back to work should be part of the Governments guidelines due imminently.
CW, SAS Daniels: Ultimately there is a limit to what employers can do to ensure their employees are safe on public transport – they need to remind employees that they must adhere to social distancing guidelines and use other means of travel if possible. However, for some, using public transport to get to work will be unavoidable – therefore employers should prepare themselves for employees refusing to come in to work if they have to take public transport and therefore do not feel safe doing so. If this happens, the employer will need to assess the reasonableness of such as refusal to attend work in all the circumstances and then deal with the matter accordingly e.g. continue to furlough the employee, unpaid leave, or even a misconduct issue. It is somewhat disappointing that the Government’s most recent announcement did not provide any further clarity in relation to this issue.
It is looking increasing likely that restrictions are soon going to be eased to enable businesses to get back to some semblance of normality, albeit a different normality. However certain sectors are going to be at the back of the queue to commence operations again, especially pubs and restaurants. What ongoing support measures can be introduced in order to ensure these establishments can weather the storm and come out the other side?
SAS: Government guidance is still needed in relation to this point – however, when producing such guidance, they Government needs to bear in mind the actual practicalities of operating businesses such as these. There is no point in simply stating that people must maintain distances of 2m as, without any further guidance or assistance, this will mean that most pubs, clubs, restaurants will be unable to open as it will simply be uneconomical to do so. Therefore, unless guidance can be produced that will allow these businesses to operate with a degree of normality, then I do not see how these businesses will be able to open again any time soon. It may be that the Government instead provides further financial support however this can only go so far – and many businesses would instead benefit from robust advice allowing them to open.
SMBC: Another key point and its something the Economic Resilience Forum has been looking at and we have some sector specific groups which will help us to identify the needs of each sector that we can either support locally or feed into Government thinking.
What are the time frames are you estimating for Covid restrictions that effect the local economy, to be in place?
We are currently thinking about the next immediate phase of the next six weeks as hopefully some measures kick in to ease out of lockdown – but we are anticipating there being some social distancing measures in place for many months and probably into next year. We don’t know any more than anyone else at present and we will hopefully know more following the Prime Ministers message on Sunday.
Do you see this being a slow recovery back to normality, or a protracted cycle of easing and then imposing restrictions?
We very much hope that we have a managed process to easing out of lockdown and we don’t have a resurge and more measures imposed. But we will need to respond to situation as we face it over the coming months and adapt accordingly. Clearly further lockdown measures would be even more impactful and not something we need at this point in time.