Five Ways Local Authorities are Supporting Small Businesses
Whilst the majority of the help being provided to small businesses during the coronavirus lockdown in the UK is coming from central government, local authorities are also playing their part.
Central government has far more power, given they can provide much more funding and modify policy. Their two biggest central government initiatives remain the CBILS loan and the job retention scheme.
All local authorities are communicating what central government support is available and making relevant for their particular area to help address the highest priority local needs. The Local Government Association provides good pointers on this for councils in their online hub.
What are local authorities doing beyond providing information?
We carried out some research on this, which involved speaking to some of our council clients and small business colleagues.
Local authorities’ core priority is to keep council services running, which includes adult and child social care, an area that has been heavily impacted by the virus.
There is also a significant amount of administering that government support packages are taking at a local level - the business rates grants in particular. In addition, business rates income provides local authorities with core funding alongside council tax, so it’s no surprise that English councils welcomed the recent extra funding from central government with such open arms.
From our research, we found there were five activities at the core of the approaches being taken:
1. Lobbying central government.
Local authorities have the ear of the central government through the Ministry of Housing, Communities and Local Government (MHCLG) and some are writing letters to ministers, offering the view from the ground and making suggestions.
For instance, London local authorities have written letters to the Chancellor asking to bring forward help for the self-employed, expand the reach of support to include owner-directors of small limited companies and to financially support Business Improvement Districts (BIDs).
One area where local government can really make a difference is in putting pressure on the government to improve the CBILS scheme - as we described as the main ‘safety net’ for businesses in our recent post about the way that owner-directors of small businesses have fallen through the cracks in the Chancellor’s support package. Furthermore, there are a lot of creative freelancers who have got caught up in this who are keen to not become indebted, so it’s vital that this area is resolved for the health of the creative economy. The Stage reports that 42% of creative businesses have lost all their income.
In a recent ‘virtual town hall’, Paul Scully MP, Minister for Small Business called on people to generate solutions for the limited company director issue. He asked specifically how the government can differentiate between dividends paid in the same way as salaries and traditional share dividends.
It is really important that we retain our economic capacity and capability. As Martin Varsavsky said in a recent Tech Open Air webinar discussion about the COVID19 recovery, “It’s OK to bend the economy, but if you break it, it won’t spring back”.
References: Letters from Lambeth and their 7 BIDs focussing on general support for business and for the cultural sector in particular and from Westminster.
2. Using proactive means to get money where it’s needed.
We’ve picked up three ways that councils are helping:
A. Automatically making adjustments to business rates.
In theory, these can be amended automatically in council back-end systems. In practice, it’s harder than this and I’ve spoken to small businesses that are struggling to get their business rates grants paid. The issues have been down to information on the system being incorrect.
B. Being considerate clients.
Local government can sometimes take time to pay suppliers. All local authorities I spoke to are now going as far as they can to ensure all their suppliers are paid in a timely manner.
C. Converting existing granting schemes.
It would be a lot to ask local authorities to set up new funds at the moment, given their financial and operational situations; that’s easier for national and regional government. What councils are doing is highlighting existing grant and loan schemes in a way that directs funds to businesses in need at the moment.
Liverpool is a standout example. They have constructed a well-thought out package that brings together a number of valuable initiatives under one umbrella. This includes three programmes all supporting the city’s SMEs in different ways: ‘Sustain’, a six-week programme of intensive support for across all sectors; ‘Gather’, free online support to Liverpool City Region SMEs working in the digital, creative and tech sector; and ‘Mettle’, an online business resilience programme, supporting SMEs in the digital, creative and tech sector.
Reference: Liverpool’s £15M business support package and Croydon’s enterprise loan fund.
3. Marketing and promoting local services.
Council communications channels and networks are able to provide extra profile for local businesses This includes businesses from sectors such as food delivery services and professional services such as accountants and lawyers.
We’ve also seen the emergence of new pay-it-forward schemes, where customers pay now for future goods and services to help with businesses’ current cash flow issues.
This is an evolving area and so we envisage adding updates to this section in the coming days and weeks. Someone has already got in touch letting me know that the Local Buyer’s Club have set up a database of businesses that are still operating across London.
Reference: On 20 April, the Mayor of London launched ‘Pay it Forward London’.
4. Going virtual - Webinars and Q&As and going virtual.
We are now firmly in the age of the webinar and virtual meeting, and I can see the trend for online events continuing even after lockdown. It’s so much easier to attend events now without the travel and Zoom is the undisputed king/queen, although its sudden fame has brought some well-publicised security failures.
The Federation of Small Businesses (FSB) have really stepped up to the challenge of coronavirus. They host webinars in partnership with local authorities and also present their own excellent webinar on Friday afternoons from 2-3pm where they take questions from small businesses, bringing in UK Finance and other bodies on a rolling basis. Recently, they’ve been focussing on how small businesses can get themselves fully prepared to make their CIBLS applications.
The FSB is also working closely with councils to co-host webinars. A recent FSB webinar in Brent included council officers from the business rates team.
The South London Chamber of Commerce and LB Greenwich hosted a really useful session for small business. They not only had council officers, but also lawyers, accountants and other local specialists on the call dealing with pressing queries from businesses.
Many councils are now hosting planning committees virtually.
Reference: The FSB’s programme of webinars over the next few weeks with London boroughs.
5. Support for residents - food, mental health and hardship.
With the CBILS scheme only managing to get money to one in five businesses that have applied so far, many people who run small businesses now need to access universal credit or are living off their life’s savings.
The appetite for volunteering has increased exponentially. Councils are supporting this by highlighting initiatives such as the grassroots Facebook Mutual Aid groups, making people aware of existing volunteer services or establishing their own volunteer networks.
Councils are also offering hardship funds, mental health support and council tax holidays to residents in the most urgent need. This is a valuable safety net to have at this challenging time.
Reference: The Wirral have launched the online service The Wirral Infobank, which matches residents' needs with local sources of support during the coronavirus crisis
Re-positioning for the rebound.
Business as usual will return but with a number of new opportunities and challenges. We’ve picked three opportunities and challenges to highlight, and then set out what we see as being three areas that require focus now to get ready for the rebound.
The top three opportunities as we see them are:
We are now more conscious that that people are able to adapt their consumption patterns, and we’re able to see first-hand how this has allowed nature to thrive.
There is now more recognition of the contribution that key workers make, and how the term ‘key worker’ now spans a broader definition than before - including refuse collectors, sewage workers, retail staff and delivery drivers. The people who are critical to keeping things running.
Digital transformation has been accelerated with the numbers of people working from home leading to opportunities for services to be delivered virtually.
The top three challenges as we see them are:
The UK at all levels of government will be heavily indebted and so it is likely that taxes will need to be increased to address the deficit. This will drag on the UK and also global economies.
In certain ways people’s behaviour will have changed permanently so some business models will no longer be viable. It will be critical that pandemics and highly impactful events will now need to be factored into business plans.
Funding that would otherwise have been made available for the regeneration of town centres and high streets, e.g. for further rounds of the Future High Street Fund will have to compete with other demands on government money.
We think this will lead to four areas of focus for local and regional authorities:
There will be less reliant on government funding for capital investment, which means places will need to attract private sector investment to fund local regeneration.
Demand patterns will have changed. People will have got to know their local centres and services better from their increased use of parks to understanding local ‘direct to consumer’ delivery options.
High street transformation will accelerate as we see voids from retailers that were unable to stay afloat during the pandemic along with the accelerated challenges to retail and hospitality sectors from changing consumer behaviour.
People will be energised to build a better world. Structure will be required to help them to make a difference. There’s a good post by Marc Andreessen on this entitled ‘it’s time to build’.
How Remarkable City is helping local authorities
We would love to work with local authorities on the rebound and specifically across five areas -
We work with local authorities to develop place brands and inward investment strategies.
We helped LB Lambeth create Lambethnow.co.uk.
We work with local authorities to rethink area regeneration, town centre or high street strategies, as well as sector and workspace strategies. This will ensure you are best placed to support the economy during its recovery phase.
We have developed strategies for Shoreditch, West Hendon Broadway and Chipping Barnet. We helped Tottenham develop their workspace strategy.
It will fall to councils to become more proactive in the property market. We help local authorities work more closely with property agents and landlords, diagnose issues and help to co-design new services and planning policy to address challenges such as voids.
As part of our work with LB Lambeth, we helped set up their inward investment team.
We work with local authorities to build the structures and systems that underpin startup and sector-specific ecosystems in your area.
We led the development of Tech City for Hackney, working closely with Number 10 and the UK’s tech sector.
We help to build sustainable economic ecosystems that champion organisations that contribute to local and global resilience.
Balancing sustainability and the economy is a key theme in the work we’ve doing to support Hackney’s international partnership with Oslo and also in our work with the Zero Emissions Network.
What do you think? And what have we missed?
We’re all in this together, so it’s a good time to share. We’d love to hear any thoughts or ideas you have.
Get in touch with Remarkable City founder at duncan@remarkable.city. We’d love to hear from you. Let’s talk (on Zoom!).
Join the conversation with us on social media, we’re @remarkablecity on Twitter and Instagram.
And good luck. We will get through this and we will thrive.
Duncan Ray, Founder / CEO, Remarkable City
22 April 2020
duncan@remarkable.city, @duncan__ray on Twitter
