One in seven UK businesses are ‘at risk’ of closure in the first half of 2021 with many coronavirus business support measures due to close in March and April, according to the latest research.
The data comes from the London School of Economics’ (LSE) Centre for Economic Performance (CEP) and the Alliance for Full Employment (AFFE), showing that many UK firms are at imminent risk of insolvency, with micro businesses the most at risk.
Ahead of the Budget on 3 March, many businesses are seeking guidance from the Government on the plans to move forward out of lockdown and more information on the future of many of the COVID-19 support schemes that are set to come to an end in the next couple of months.
Many UK businesses have faced extended periods of closure as a result of lockdown measures in the last 11 months, with the retail, leisure and hospitality sectors particularly affected. Some businesses in these sectors have called for more targeted support to ensure that they avoid insolvency in the coming months.
Pressure has been increased on the commercial property sector as well, with the moratorium on evictions being extended and rent collected falling below usual levels because of cash flow problems due to businesses closing.
The Chancellor, Rishi Sunak, is expected to outline plans in the upcoming Budget, with the Furlough Scheme and key loan and grant measures set for discussion, with business leaders asking for a ‘roadmap’ of the Government’s plans to support businesses and employees over the next few months.
Registered businesses in the ‘at risk’ group of the LSE-AFFE survey currently employ 1.9 million people, totalling eight per cent of the private sector workforce, highlighting the severity of the situation.
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