The Welsh Government is making an additional £140m available to businesses to help them deal with the economic challenges of Covid-19 and the UK’s impending exit from the EU, Economy Minister Ken Skates has announced.
The funding from the third phase of the Welsh Government’s Economic Resilience Fund (ERF) will see wider support being provided to secure jobs and help businesses develop, as well as additional help for firms affected by local lockdowns.
To date, the ERF has delivered almost £300m of support to more than 13,000 companies in Wales. This has helped to protect in excess of 100,000 jobs which might otherwise have been lost.
This new phase of the ERF will see £80m being made available to support businesses with projects that can help them transition to the economy of tomorrow. It will require co-investment from companies and a clear plan about how they will adjust to the post-covid economy.
Of this, £20m will be ring fenced to support tourism and hospitality businesses who are facing particular challenges as they enter the winter months.
Meanwhile an additional £60m will be allocated to support businesses impacted by local lockdown restrictions.
The rest of the funding will be used flexibly to provide additional support, for example to increase lending to Welsh businesses through Development Bank of Wales initiatives and to help companies deal with the impacts of the UK leaving the European Union.
The ERF has been designed to complement and build on the support offered by the UK Government.
Economy Minister Ken Skates said: “Our Economic Resilience Fund has been absolutely crucial in supporting businesses throughout Wales in dealing with the economic challenges of the coronavirus and helping protect the livelihoods of more than 100,000 people.
“The next phase of the fund, worth £140m, builds on that success, helping us to secure jobs and enabling businesses to continue to develop and grow in these challenging times. There is also a specific part of the fund earmarked to support businesses affected by local lockdowns.
“This additional help has been designed to complement and build on the support announced by the Chancellor last week, again demonstrating the Welsh Government’s proactive approach to go above and beyond in providing extra financial assistance that we know our businesses and workers need.”
The £80m worth of business development grants will be open to micro businesses, SMEs and large businesses.
- Micro businesses (employing between 1 and 9 people) will be able to apply for up to £10k on the condition they match this with their own investment of at least 10%.
- SMEs (employing between 10 and 249 people) will be able to apply for up to £150K on the condition they match this with their own investment of at least 10% for small business (1-49 staff) and 20% for medium sized (50-249) business.
- Large businesses (employing 250+ people) will be able to apply for up to £200K on the condition they match this with their own investment of at least 50%.
Companies that received grant funding through phases one and two of the ERF, or Non-Domestic Rate linked support, could also be eligible for phase three of the ERF.
The Minister added: “We are going through a time like no other. Coronavirus and the increasing risk of the UK reaching the end of the European Union transition period without a deal have placed incredible challenges on our businesses.
“As a Welsh Government, we continue to do all we can to back our businesses, our workers and our communities.”
Finance Minister Rebecca Evans said: “The package of support we have provided for Welsh businesses has been, and will continue to be, absolutely critical as we move into the next phase of addressing this crisis.
“Today’s announcement provides reassurances to businesses at a time they need it most.”
The Eligibility Checker for companies to find out if they can access funding from the third phase of the ERF will be live during week commencing 5 October.
Commenting on the announcement on funding for businesses made by Ken Skates, Ben Francis, FSB Wales Policy Chair, said:
“Many small businesses who are suffering the financial impacts of a local lockdown will breathe a sigh of relief that this grant has been announced.
“For Welsh businesses, 2020 has been a fight for survival, and many firms will have already extinguished their reserves in just surviving the initial lockdown. That’s why FSB Wales has for some time been calling for a Rapid Reaction Business Fund to support those firms that are impacted by local lockdowns. We are pleased that Ken Skates has listened to FSB by introducing the third phase of the Economic Resilience Fund and focusing some funding on those affected by local lockdowns. A local lockdown – particularly where it has come hot on the heels of the national lockdown – is presenting huge challenges for those SMEs that are such a crucial part of our towns and communities and we hope that this grant funding will support those that are struggling most. We continue to be concerned about the impact of travel restrictions on many firms in the run up to Christmas, which would ordinarily mark a busy time of year.
“Whilst this funding is significant, it is important to note that businesses also need timely communication to help them deal with the impact of a local lockdown. FSB has been working hard with Welsh Government and local authorities in South Wales to provide this and to help learn the lessons from earlier lockdowns in Leicester and Aberdeen. We would urge all local authorities in Wales to consider how they can best communicate with businesses who rely on hearing timely advice on what a local lockdown means for them and what they can and cannot do.
“We are also pleased to see that funding will be targeted at helping businesses innovate and adapt for the long-term changes Covid-19 will bring to our economy. It is important that this funding is also matched by training and guidance through Business Wales to help those rethinking their business model or even starting a business for the first time.
“It is true that tourism and hospitality firms have been some of the worst hit in Wales and we are pleased to see that some of the funding will be ringfenced to help those businesses through the winter, although we hope to see more detail on this. This scheme does fall short of FSB Wales’ proposal of a targeted Tourism Hibernation Fund to support those businesses who had, in effect, experienced three consecutive winters and would need government support to weather this. However we hope to see more detail which will demonstrate how the scheme will support those businesses that are vital employers but have missed out on an entire season’s trade.
“Ultimately, as we have seen earlier in the year, the success of this scheme will come down to its accessibility. Firms need to be able to access this funding with minimal hurdles and with an application process that is as straight forward as possible. We are pleased to see that applications will be open before the end of October and would stress the need to get this money into the hands of those that need it as quickly as possible, in order for it to have the biggest possible impact across Wales.”