Financial support for Omicron hit businesses announced!

The Government announced on Tuesday a new £1bn support package for Omicron-hit businesses. The new measures include:

•  One-off grants of up to £6,000 per premises for hospitality and leisure businesses
• The reintroduction of the Statutory Sick Pay Rebate Scheme for Covid-related absences for small and medium-sized employers; and
• £30m further funding will be made available through the Culture Recovery Fund.

Announcing the latest schemes, The Chancellor said: “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. So we’re stepping in with £1bn of support.”

One-off grants

Roughly £683m has been earmarked in extra funding for hospitality and leisure businesses. Sunak has taken a similar approach to the January lockdown and is offering businesses in this sector a one-off grant of up to £6,000 per premises.

As in January, the grants will again be based on the rateable value of the premises in three bands.

Rateable value                         £0-15k             £15-51k           >£51k

Value of grant                          £2.7k                £4k                  £6k

Businesses eligible for these grants must be solvent and ratepayers in hospitality and leisure in England. The government guidance cited pubs, hotels, restaurants, bars, cinemas and amusement parks as example recipients.

The funding comes as hospitality businesses have seen a spike in cancellations. Some businesses have reported losing around 40-60% of their December trade.

The package is a little less than January’s grants of up to £9,000, but the government guidance notes that earlier in the year businesses were “fully closed”.

There is no clear timeline on when businesses will gain access to funds, except that the grant will be administered by local authorities in “the coming weeks”. The government estimates that around 200,000 businesses will be eligible for this grant.

Though the grants are up to £3,000 less than January’s offering, the government notes that many businesses have more cash in the bank than they did at the start of the pandemic and net cash deposits for all hospitality businesses have risen by £7bn (40%). Small and medium-sized businesses in the hospitality sector have seen their cash deposits rise by £2bn (79%).

Culture recovery, ARG and SSP

In addition, the Treasury opened up £100m discretionary funding to local authorities to support other businesses through the additional restrictions grant (ARG). The grant announced yesterday is in addition to the £250m that local authorities still have to distribute.

The press release specifies that the ARG top-up will be prioritised to the local authorities that have distributed most of their existing allocation.

With the variant likely to quiet the panto voices and scale back West End audiences, the government added a further £30m to the culture recovery fund to support theatres, orchestras and museums in England until March 2022.

The Chancellor  also announced the return of the Statutory Sick Pay Rebate Scheme (SSPRS).

The scheme is available for employers with fewer than 250 employees and will reimburse businesses for the cost of Covid-related absences for up to two weeks per employee.