I am aware of the issues that face the charitable and social enterprise sectors, which is one of the reasons why we expanded the grants system to give charities access. That was about dealing with the crisis; we also need to help parts of the economy to develop, and charities have a role as part of our societal response.
Businesses whose international markets have been lost or disrupted must reconnect with their supply chains and create new markets, and they must do so in an environment in which consumer sentiment in the United Kingdom has fallen to its lowest level since the financial crisis, with personal finances deteriorating sharply since March. Business optimism, too, has fallen sharply amid significant uncertainty around the pandemic and its wider economic implications.
We still have the impending impact of Brexit to contend with. The real risk of a no-deal outcome will compound and exacerbate the crisis.
It is important to set out that context and to be realistic about the scale of the challenge ahead. The economic situation that we face is unprecedented and will require an unprecedented response.
When the crisis hit, we moved quickly to support businesses to deal with cash-flow challenges through our £2.3 billion business support package, but we are aware that many businesses have had to take on debt to survive. Where we can do more, we will. Where the current funds are not oversubscribed, we are committed to taking any available funding and targeting it back into the economy where it is needed most.
The most recent figures, which are from last week, show that £790 million has been awarded to more than 69,000 ratepayers through the two business grant schemes.
Last week, I announced that we would extend the small business grant fund to applications from small businesses that occupy shared office spaces, business incubators and shared industrial units and lease the space, where the landlord is the registered ratepayer.
We will also extend the upper threshold for retail, hospitality or leisure properties with individual rateable values of up to £18,000 each. From 8 June, the cumulative threshold, which is currently £51,000, will be increased to a cumulative value of £500,000. That almost tenfold increase will benefit more than 2,500 premises.
On 30 April, we launched a £100 million package across three business support funds, offering targeted support to the creative, tourism and hospitality sector, small and medium-sized enterprises that are vital to their local economies, and the newly self-employed.
One month on, we have awarded more than £104 million in grants to those businesses and enterprises. We have supported around 2,500 businesses and 4,160 self-employed people, topping up those funding streams, given the volume of applications received. The additional funds that have been announced will enable us to reach more businesses in need.
Today, I announce that £3 million of the newly self-employed hardship fund allocation will be repurposed to support bed and breakfasts that were ineligible for other support, due to their not having a business bank account. We expect applications to open for that fund, which will be administered by local authorities, on 15 June.
In the short to medium term, businesses will need further resources to aid recovery as they rebuild their working capital. In the longer term, the unprecedented level of borrowing that we are seeing may affect the resources that are available to invest in growth and innovation to improve productivity.
We know that the economy will not rebound to 100 per cent immediately; a gradual return and reduced demand will impact business and employment beyond the end of the current support schemes. Our support for businesses must go beyond the financial. We will listen to businesses and support them to learn lessons from other countries, and to innovate and institute new practices and processes.
Our enterprise agencies have been working tirelessly to support their local economies with non-financial support and advice. Scottish Enterprise has been safeguarding jobs and supply chains through its work with company administrators and using its networks to identify and secure buyers. Highlands and Islands Enterprise has redesigned many of its services to be delivered digitally. South of Scotland Enterprise has continued to build its capacity, engaging with stakeholders since its launch in April to provide targeted support for businesses.
In addition to that, access to affordable upskilling opportunities was identified as an early priority, and Skills Development Scotland launched free online learning opportunities in April, with more than 80,000 visits to those resources in a month. At the end of this month, the enterprise and skills strategic board sub-group on unemployment will report its initial findings and recommendations for action to the Scottish ministers. The group is working at pace to agree a short list of practical actions that Government can take quickly to mitigate the rising levels of unemployment, with a particular focus on young people.
During times of recession, it can be a challenge to continue to invest in the skills base. However, now more than ever, there needs to be support to ensure that we can draw on all our talent in the recovery phase. We cannot lose our focus on promoting fair work and ensuring that those who have traditionally faced greater barriers in entering the labour market are not left behind. We must continue to support young people, disabled people, those from ethnic minority backgrounds, care-experienced young people and people with convictions.
We know that the impacts of this crisis will not fall evenly. The majority of our key workers are women, but they are more likely to be lower paid and in precarious or temporary employment. Our recovery must ensure that we are closing the gender pay gap and the disability employment gap.
Lockdown has demonstrated that a significant proportion of work can be done at home, keeping many parts of the economy and society moving during lockdown while keeping people out of harm’s way. We know that it can work, and it can be improved by investing in new technology and approaches that can be a catalyst for more flexible working, reducing travel and commuting, and more balanced lifestyles. Those are all critical aspects of an inclusive, wellbeing economy.
If we are to change the way we think about work, models such as community wealth building, which require government at all levels, businesses, and communities to work together to invest in and grow local and regional economies from the asset base that they possess, must be central to our recovery. Interest in the community wealth building model is growing rapidly across Scotland. The Scottish Government has committed to £3 million of investment as part of the Ayrshire growth deal to accelerate progress on that.
This is an international crisis that needs a national recovery, but our response must be based on local and regional solutions. In recent years, our focus on inclusive growth has seen us work with local authorities to better understand the drivers of poverty and inequality and how those link to economic sustainability and the ability to create better jobs with their roots in local communities.
Over the past few weeks, we have had emptier roads and we have embraced our relationship with nature through our daily exercise. We must build on that, ensuring that our economic recovery is a green recovery. We have an ambitious climate change target of ending Scotland’s contribution to climate change by 2045. We also have a strong track record in supporting decarbonisation projects through low-carbon heat, hydrogen, carbon capture, utilisation and storage, on and offshore wind and the electrification of transport, which must surely be part of that restart and recovery.
Our end goal has not changed but, as a result of this crisis, the path that we take may have to. It may be more challenging, but we should look on the process of restarting the economy as an opportunity to fully embed the principles that we have all signed up to, which are those of a green economy for Scotland.
I absolutely understand and sympathise with the sacrifices that are being made by businesses and individuals, and the hardship that this is causing. I think that members from all sides of the chamber recognise that the restrictions that are in place are vital to suppressing the virus. The transition out of lockdown must not risk undoing what we have achieved so far, but we must also not lose the opportunity to learn from the crisis. Indeed, we must recognise that some measures will—and should—remain part of daily life for the foreseeable future.
As I said earlier, this is an unprecedented situation for our economy. Recovery will require everybody in the Parliament to work together to be part of the solution. The Parliament has an opportunity, and a duty, to lead and to demonstrate that we can work together to shape a new economic future—one with a better balance of work and wellbeing.
We must mobilise all the significant talent, experience and thinking that exists throughout Scotland and beyond to help Scotland’s cause. I want the Parliament to be a key part of that, starting with this debate, and to begin to set out some of the ideas and thinking that will drive our recovery over the coming weeks and months. I look forward to hearing members’ contributions.
16:40