A North East COVID-19 Economic Response Group has launched to provide business resilience and get the region ready for recovery throughout the COVID-19 outbreak. It has a five point plan in place.
Colin Bell, Business Growth Director at the North East Local Enterprise Partnership (LEP), explains how the North East COVID-19 Economic Response Group is leading the response in terms of business continuity.
The North East COVID-19 Economic Response Group has come together to mitigate the shock created by Coronavirus, think about what the recovery looks like, and harness the collective energy and ability of the business community to make that upturn happen.
Now is an extremely challenging time and the biggest issue facing everyone is cash flow. Most self-employed and business owners are doing everything they can to keep their heads above water until they can access some of the support Government has made available.
The Coronavirus Job Retention Scheme and Self-Employed Income Support Scheme are the most significant measures that have been put in place but there is a period of time before people will be able to access these so it’s about buying time.
A partnership approach
Being able to draw upon the knowledge and expertise of the CBI, which is part of the North East COVID-19 Economic Response Group, along with the North East and North of Tyne Combined Authorities, is crucial right now as we look at the issues facing large organisations.
These companies have similar issues to smaller companies but on a much larger scale, for example they may be furloughing staff and / or have seen a big drop in demand. Wider challenges for some management teams who continue to operate include trying to manage a reduced workforce where perhaps people are having to take time off to self-isolate, along with the need to reassure those who are still in work and their families about their safety. Where products and services are being supplied to the NHS there is a particular need for business as usual.
It’s important to recognise that in terms of safety, North East businesses have really stepped up to the plate here. Many could technically still be trading right now but have taken the moral decision to furlough staff and place people before profits and that is to be commended.
Government is listening
For the self-employed, it was a big win when the Chancellor of the Exchequer announced the introduction of the Self-Employed Income Support Scheme, a vital lifeline we had been lobbying on and it reinforces that Government continues to listen and respond. The big challenge is we won’t really understand how people can access this until June, however on the plus side, it seems this group should still be able to generate income in the interim.
Another welcome step forward is the extension of the Coronavirus Business Interruption Loan Scheme to smaller businesses who would previously have met the requirements for a commercial facility but not have been eligible to apply. Equally, the removal of personal guarantees for facilities under £250k, and capped recoveries for loans over this figure, is a big game changer and will help big and small companies alike.
As a Group, one of our biggest priorities is ensuring businesses exist in three months’ time. As before the crucial factor in that is the need for working capital so we are signposting hard.
Diversification can help
Where businesses can trade, for example online and in distribution, we are working flat out to support them as much as possible. Alongside this we are trying to point those in industries where demand may have flattened to those where it has spiked, in case they can capitalise by putting core competencies to use in a way perhaps outside the norm.
It’s a complex arena but we are trying to identify and share opportunities wherever we can and facilitate that diversification. Similarly we are putting lots of effort into rerouting skilled labour where it can be best utilised during this time of crisis.
There is one area in which people can help us. We’re gathering as much data as we can right now to ensure we’re providing the right support and so we can share this intelligence with Government to help inform what next. This is why we’re asking all businesses owners to complete this survey. If you haven’t done this yet, please do so now.
To stay up to date with progress, follow @northeastlep on Twitter or visit the North East COVID-19 Economic Response Group page. Lots of helpful support can also be found on the North East Growth Hub.