Who benefits from the £1bn Covid support fund?

Chancellor Rishi Sunak has announced a £1bn fund to help support businesses through the latest spike in Covid cases caused by the Omicron variant.

Although retailers have been hit by a drop in footfall, the support targets hospitality businesses including pubs and restaurants, which will be able to apply for cash grants of up to £6,000 per premises.

Kate Nicholls, UKHospitality CEO, said the “generous package” would provide an “immediate emergency cash injection” for businesses. 

Many businesses have been hit hard by cancellations and reduced footfall, losing 40-60% of their December trade, according to UKHospitality. Around 200,000 businesses will be eligible for business grants. “It will help to secure jobs and business viability in the short term, particularly among small businesses in the sector, and we particularly welcome the boost to funds for the supply chain and event and business catering companies so badly affected by the reintroduction of work from home guidelines,” Kate said.

The Government said more than £100m in discretionary funding will be made available for local authorities to support other businesses, including wholesale food suppliers of the hospitality and leisure sectors.

The Federation of Wholesale Distributors also welcomed the support. “We are very pleased that the new support package specifically includes businesses that supply the hospitality and leisure sector, which means food and drink wholesalers will be supported,” said CEO James Bielby. “The Additional Restrictions Grant has been a lifeline for food distributors who have not been included in direct support for hospitality. It’s very encouraging that the Chancellor has recognised the vital role they play in supplying not only pubs and restaurants but care homes, schools and hospitals.”

The Government will also cover the cost of Statutory Sick Pay for Covid-related absences for small businesses with fewer than 250 employees.

While many fine food retailers were not badly impacted by Covid lockdowns thanks to their essential retailer status, for those that are struggling the news was a blow. Andrew Goodacre, CEO of the British Independent Retailers Association (Bira), said, “Independent retail, and retail in general, will feel very disappointed with this announcement. Retail seems to be the forgotten part of the high street. Shops do not have cancelled bookings to shout about. However, we do have lower footfall, cancelled trips to the shops and therefore cancelled purchases at a critical time of year – just as much damage but just not as ‘visible’.

“The chancellor claims to respond proportionately, but he has done nothing for independent retail, pointing us to existing support schemes such as rates reductions. They do exist, but they exist to help businesses recover from previous damaging lockdowns, not to deal with a brand new crisis such as Omicron. This is why new support for struggling retailers is required,” he said. “The high street is a mixture of independent businesses from hospitality, leisure and retail. If one of these fails, the high street is a worse place to be with other businesses suffering.it will cost the government a lot more to put right in the future compared to helping save livelihoods and jobs now.”

“We recognise that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time,” said chancellor Rishi Sunak. “Ultimately the best thing we can do to support businesses is to get the virus under control, so I urge everyone to get boosted now.”