By Kristy Dorsey

Help from the Scottish Government is urgently required to ensure that suppliers to the country’s hospitality and retail businesses don’t remain left out in the cold by public health restrictions.

The Federation of Small Businesses (FSB) has called on ministers to extend grant support to those firms that have not been directly shut down, but have still seen business evaporate as their clients have been forced to reduce trading. This includes suppliers of everything from food and beverages to cleaning services and taxi drivers.

The appeal comes as discussions continue on the terms and administration of a £30 million “discretionary fund” that will be administered by local councils to support businesses hit by coronavirus restrictions. Details about the fund – promised by the Scottish Government as 11 council areas went into Tier 4 restrictions earlier this month – have yet to be announced, and it is not yet open to applications.

In a letter to the Scottish Government and local authority leaders, the FSB urged Cabinet Secretary Kate Forbes and COSLA president Alison Evison to work together to ensure support reaches thousands of small businesses and self-employed people who have had little or no government help since the start of the crisis.

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Andrew McRae, Scotland policy chair for the FSB, said ministers in Edinburgh “need to treat this matter with the urgency it deserves before making further changes to public health guidance”.

“The impact of the current Scottish restrictions extends beyond the firms forced to close or reduce their hours by law,” he said.

“Thousands of businesses which supply our retail and hospitality sectors are facing similar levels of hardship as those that have been hit directly. But these firms are no more to blame for this crisis than anyone else, and should therefore get some grant help.”

The FSB has made similar representations to the UK Government, which has come under fire from some quarters for failure to amend rules on who can receive money under the Self-Employed Income Support Scheme (SEISS). Although Chancellor Rishi Sunak announced the extension of SEISS earlier this month, he did not expand its scope to include an estimated three million self-employed and one-person limited companies that do not qualify under existing criteria.

In a survey of its membership in Scotland, the FSB found that a fifth of all small business owners and self-employed individuals have received no support from either the UK or Scottish government.

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“It is grossly unfair that tens of thousands of small businesses and self-employed in Scotland have been left high and dry during this crisis,” Mr McRae said. The new £30m scheme announced by the First Minister, and to be administered by councils, provides an opportunity to address this glaring oversight.

“While we accept the need for local flexibility and knowledge, there are groups of operators that’ve been excluded the length and breadth of Scotland. For example, home-based businesses have received little help from Dumfries to Durness. Local and national policymakers need to tackle this problem systematically.”

Noting that the Fraser of Allander Institute (FAI) has estimated there could be up to £1 billion of Scottish Government funding for the current financial year that remains uncommitted, the FSB is also urging ministers to examine whether the initial £30m funding pot is sufficient to help all businesses facing restrictions.

Mr McRae concluded: “It is frustrating to see wave after wave of restrictions, then weeks later, a trickle of support for Scottish businesses. And less than £1m of support per council area won’t stretch very far.

“Ministers need to investigate whether the help on offer is sufficient and then work with councils to ensure that it reaches businesses quickly.”