Birmingham warns of ‘unprecedented economic collapse’

Whilst the authority says the government’s support for business is welcome, they warn there is concern from businesses that the measures do not go far enough and more needs to be done to help them survive.

The council’s proposal to government seeks additional grant funding to establish a £100m Business Survival Fund, to ensure that gaps in the current provision are addressed through responding to the needs of individual businesses. This will be complemented with additional government funding to establish a National SME Equity Fund.

The fund will enable the council to offer financial support to businesses which do not qualify for the Government’s Small Business Grants or the Small Business Rates Relief (SBBR). In Birmingham, this represents near 70% of SME’s in the city.

Feedback from SMEs to a council survey, undertaken at the end of March, attracted 1,000 responses. The vast majority of businesses have seen a collapse in revenues, are suffering serious cashflow problems, and are predicting that they will be letting staff go and even closing their business. Businesses are also continuing to struggle to access loan funding from the banks.

Leader of the council, Councillor Ian Ward, said: ‘It’s clear that COVID-19 has created an unprecedented crisis for Birmingham’s business community and we need urgent action now to safeguard jobs and futures.

‘Businesses across the city are telling us that the measures set out by Government do not go far enough and more needs to be done to help businesses survive and prevent what would be an unprecedented economic collapse across the City and wider region.

‘The consensus is that it is time to go further and implement additional measures to retain as much of our business and employment base as we can. We are therefore urging the government to ensure that badly hit businesses do not fall through the cracks.’