Coronavirus (COVID-19) business support: equality impact assessments

Covid-19 Break Restrictions Fund 2020-21 & Furlough Scheme

Name of Grant:

COVID-19 Break Restrictions Fund 2020-21 and Furlough Scheme

Policy Lead

Andrew Baird

Legal power used:

Section 126 of the Housing Grants, Construction and Regeneration Act 1996.

Grant Overview:

The COVID-19 Break Restrictions Fund was introduced to support businesses impacted by the temporary measures implemented to stop the further spread of coronavirus on Friday 9 October 2020. It consisted of two funds, one designed to support businesses forced to close (The COVID-19 Business Closure Fund) and another designed to support businesses who were still open but negatively impacted by the restrictions (The COVID-19 Business Hardship Fund).

The COVID-19 Business Closure Fund was available to hospitality and other businesses required to close (except for takeaways) by the new and extended restrictions. It operated as a two-tiered scheme, with a grant of £2,875 for businesses with a Rateable Value (RV) of up to and including £51,000 and a grant of £4,310 for those businesses with a RV of £51,001 and above. An upper limit of £21,000 in total applied to any eligible business operating multiple premises.

The COVID-19 Business Hardship Fund was available to support some businesses that remained open but were still significantly impacted by the restrictions including those in the direct supply chains of firms that had to close. It also operated as a two-tiered scheme, with payments of £1,440 or £2155, dependent on Rateable Value. An upper limit of £14,000 applied in total to any eligible business operating multiple premises.

These funds had been specifically developed to target businesses directly impacted by the additional restrictions. The Grant was intended and rationalised as a measure to protect jobs, prevent business closures and promote economic recovery. The Scottish Government worked with COSLA and SLAED to identify the most appropriate delivery model.

This Fund also included a support grant of up to £9 million offering support towards the costs of re-furloughing staff for those premises required to close to help sustain employment where possible.

The Furlough Support Grant provided an award of £1650 for each of the business premises in receipt of the Business Closure Fund, where at least one employee is furloughed.

The support funds were administered by Local Authorities, providing one-off grants to businesses directly impacted by the restrictions, implemented on 9 October 2020, as assessed against the eligibility criteria.

Executive Summary:

The extraordinary measures taken by the Scottish Government to protect the right to life and right to health for the people of Scotland throughout the Covid-19 pandemic have placed unprecedented pressures on Scotland’s economy and business community. Health protection regulations required certain businesses to close or placed specific restrictions on their operations at different times between March 2020 and August 2021. Many others were impacted by significant reductions in demand due to these restrictions or as a result of the introduction of domestic and/or international travel restrictions.

Further temporary measures to stop the spread of coronavirus came into effect on Friday 9 October 2020. These new restrictions were backed by a new support fund for business and the existing UK Job Retention Scheme, applied nationwide, with tighter restrictions across central belt areas where the infection rate was highest. As of 21 October 2020 these measures had been extended for a further week until 6 am on Monday 2 November. This business support fund had been adjusted accordingly.

In line with the commitment to sustainable and inclusive growth and the Coronavirus (COVID-19): fair work statement, the Scottish Government allocated funding to be allocated by the local authority in accordance with this Grant Offer Letter in order to support employees and businesses impacted by these additional restrictions.

Since the start of the pandemic, the Scottish Government has spent £4.3 billion in providing direct financial support to those businesses impacted by Covid-19 restrictions and regulation. As the impacts of restrictions were felt differently across the business community, varying according to factors such as sector and location, a range of different funding streams were developed to target financial support towards specific sectors or types of business based on the challenges they were experiencing as a result of the pandemic. Given the unprecedented challenges presented by Covid-19 it was necessary to develop financial support schemes at pace to ensure that funds were distributed rapidly in the interests of preventing business closures and preserving jobs. The additional support for business affected by the 09 October restrictions was no exception to this although, as with other funds, we have maintained a commitment to review the delivery of these funds and to update policy where necessary.

The variable impact of the pandemic on different demographic groups in Scotland and the inequalities created by this are well understood. Throughout the pandemic the Scottish Government has taken measures to mitigate these inequalities where possible. In line with its responsibilities under the Public Sector Equality Duty, as enshrined in the Equality Act 2010. In developing the additional Break Restrictions Fund and Furlough Support Grant, the Scottish Government has considered how it can eliminate unlawful discrimination, advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not. In doing so, the Scottish Government drew on a wide range of sources to understand the impact of restrictions on those with protected characteristics including statistics published by both the Scottish Government and the Office of National Statistics as well as insights from the Annual Population Survey, the Department of Business, Enterprise and Industrial Strategy’s Longitudinal Small Business Survey as well as from organisations such as Close the Gap and the Social Metric Commission.

Every effort is made to ensure that Equality Impact Assessments (EQIA) are published timeously. However, the speed at which it has been necessary to ensure mechanisms are in place for supporting businesses impacted by Covid-19 restrictions has resulted in delays to completing EQIAs for a number of business support funds.

Key Findings - impact assessment of benefits and/or disadvantages.

Advancing Equality

By distributing financial support through the Break Restrictions Fund, the Scottish Government acted to mitigate the impact of the regulations on businesses, implemented between 09 October – 02 November 2020, to support them in remaining financially viable while restrictions were in place. In doing so, this assessment shows that the Break Restrictions Fund acted to advance equalities by protecting businesses in sectors that impact on the lives of those with protected characteristics disproportionately. Alongside the Furlough Support Grant, the Break Restrictions Fund preserves jobs in sectors which employ a disproportionately high number of people from among groups with protected characteristics particularly young people, women and minority ethnic groups. Data from the Office of National Statistics (ONS) shows that minority ethnic groups, women and young people have a significantly higher likelihood of being employed in the Hospitality sector than they are within other sectors of the economy. It is worth noting that data from the Department of Business Energy and Industrial Strategy’s (BEIS) Longitudinal Small Business Survey shows that a high proportion of businesses across the retail, hospitality and leisure sectors (78%) identified as having employees with protected characteristics. More detail on this is provided in the assessment against individual groups with protected characteristics is set out below.

The Break Restrictions Fund and Furlough Support Grant do not only advance equality by preserving jobs, they also protect businesses in sectors where there is a disproportionately highly felt impact as a result of the COVID-19 Pandemic.

By supporting businesses required to close or adapt their operations as a result of the 09 October measures, the funding provided through the Break Restrictions Fund and Furlough Support Grant will necessarily go towards retail, hospitality and leisure (RHL) businesses which are more likely to be owned by and/or employ people from groups with protected characteristics and in doing so will contribute towards advancing equality by helping to prevent against business closures and job losses in these sectors.

During the period of restrictions, the Fund has acted to advance equalities.

Eliminating Discrimination

This Fund gave financial support to all businesses that had been required to close or endure hardship following the implementing of the 09 October measures designed to prevent the spread of Covid-19 and had therefore been uniquely impacted by the pandemic. As such, this assessment did not identify any specific opportunities to eliminate discrimination in developing and implementing the COVID-19 Break Restrictions Fund.

Fostering good relations

Businesses within the Hospitality sector are important spaces for social and community interaction providing an opportunity for engagement across and between groups with protected characteristics and helping to foster good relations between these groups. Businesses in the Hospitality sectors promote engagement between and across groups in a number of ways. As well being shared spaces, as highlighted above, there is a clustering of several different groups with protected characteristics in the Hospitality sector, including young people, women, minority ethnic groups and those experiencing socioeconomic disadvantage. By sharing workplaces this promotes close interaction and engagement between these groups including those with intersecting protected characteristics. In providing financial support to businesses in these sectors to remain financially viable through the restrictions, the Scottish Government is therefore acting to foster good relations between groups with protected characteristics.

Age: Older People and Children and Young People

2019 data from the ONS related to the employment of young people shows the following:

• Hospitality - 37% of employees working in the food and beverage services and accommodation sectors were aged between 16 - 24 compared to an average of 12.3% across all other sectors.

Data from the ONS Annual Population Survey provides an insight into the demographic profile of ‘bar staff’ at UK level which make up a significant proportion of those employed within the hospitality sector. It showed the following data regarding the Age of those employed in this role:

• Bar Staff – Approximately 59% of people employed as bar staff at the time of the survey were aged between 16-24 years old compared to the 12.3% share of the labour market.

This data shows that young people experience a significant disadvantage as a result of the closure licensed premises due to the disproportionate number of young people employed within these establishments. The long term ‘scarring’ impacts of the pandemic on the career prospects of young people have also been highlighted by organisations such as the Institute for Fiscal (IFS) and the Social Metrics Commission the latter of which has shown that young people (18 -24) are 7% more likely to experience a negative labour market outcome as a result of Covid-19 that those aged 25 – 44.

Due to the high proportion of young persons employed within the Hospitality sector it may well be that the eligibility criteria for the COVID-19 Break Restrictions Fund 2020-21 may inadvertently discriminate against older people as it primarily delivers support to younger people.

Sex: Men and Women

2019 data from the ONS related to the employment of women shows the following:

• Hospitality - 53% of employees working in the food and beverage services and accommodation sectors were women compared to an average of 48.8% across all sectors

Furthermore the 2017 ONS Annual Population Survey gives statistical data on the demographics of those employed as ‘bar staff’ who make up a significant proportion hospitality workers. It showed the following data regarding the Sex of those employed in this role:

• Bar workers – Approximately 58% of those employed as a bar worker were women. Significantly above their labour market share of 48.8%

It can be seen that the sectors affected by the 09 October measures employ a considerably higher proportion of females than the market average shares. Therefore this fund may inadvertently discriminate against Men due to focusing primarily on female dominated sectors.

Race

The Department of Business, Enterprise and Industrial Strategy’s Annual Business Population Survey (2019) shows that 7% of hospitality businesses are ethnic minority-led, a figure which is considerably above the average number of ethnic minority-led businesses across all sectors which is 4%.

2019 data from the ONS related to the employment of women shows the following:

• Hospitality - 11% of employees working in the food and beverage services and accommodation sectors were from an minority ethnic group compared to an average of 4% across all other sectors.

Furthermore, data from the ONS highlighting which occupations have higher COVID exposure rates also give statistics for the makeup of Bar Staff who come from an ethnic minority background:

• Bar Staff – 5% of those employed as Bar Staff are identified as coming from a Black, Asian or Minority Ethnic background compared to a labour market share of 4% across all other sectors

The fund provided much needed support to a sector that has had some of the strictest restrictions placed on it in order to prevent the spread of COVID. The hospitality sector is demonstrated to employ a small but significant number of people from minority ethnic backgrounds. Combined with the relatively low salary paid to workers in this industry, it would place a disadvantage on minority ethnic employees were we to fail to support these industries,

Disability

Specific data on business ownership and employment by sector is not available to fully assess the impact of the COVID-19 Break Restrictions Fund on those with a disability

Religion and Belief

No Discernible Impact

Sexual Orientation

No Discernible Impact

Pregnancy and maternity

No Discernible Impact

Gender reassignment

No Discernible Impact

Marriage or Civil Partnership

No Discernible Impact

Socio-economic disadvantage: any people experiencing poverty

According to the Social Metrics Commission those employed prior to the crisis and already in the deepest forms of poverty have been most heavily impacted by the economic fallout of the pandemic. For example, compared to those more than 20% above the poverty line, those more than 50% below the poverty line have been more likely top been furloughed, had reduced hours or wages, or lost their job.

Impacts have also varied significantly between workers in different industries. For example, 81% of those working in hospitality and leisure have been negatively impacted, compared to just 16% in financial services.

Research by the Fraser of Allander Institute shows those employed in the tourism and hospitality sector - those hardest hit by Covid-19 - already face precarious employment, the lowest hourly pay of any sector, the lowest hours worked per week, and are more likely to be in poverty.

The poverty rate for households with a worker in these sectors is 28%, compared to the Scottish average of 19%, with child poverty at 41% amongst these households, compared to 24% across Scotland.

Data from the ONS highlighting the higher risk exposure to COVID faced by employees in certain profession also provided statistics relating to the average pay of those workers. It highlighted that persons employed as Bar Staff had significantly low average hourly income levels.

• Bar Staff – The average hourly wage of a person employed as Bar Staff was £8.22, which is considered to be a significantly low wage when compared to the median Hourly wage of £13.68 and is considered to be a low pay job by the ONS.

As part of a 2020 study on Low and High pay in the UK, ONS defined a low pay job as being below £9.12 – less than two thirds of the median hourly wage.

Therefore failure to pay this fund to those affected by the 09 October measures would have resulted in potential inadvertent discrimination against those from a lower socio-economic background.

Stakeholder Engagement:

We have engaged extensively with businesses and their representative organisations during the pandemic. In the year to March 2021 the Scottish Government had more than 1,270 ministerial engagements with business, including virtual conferences, roundtables and calls.

Engagement with business leaders included regular communication with HMRC, CBI, FSB, IoD, SCC, SCDI, SFE, STUC, Scottish Retail Consortium, Scottish Tourism Alliance and Scotland Food and Drink etc.

This provided an opportunity to listen to stakeholder views, test ideas, share information about progress and discuss and address specific issues identified by sectors and individual businesses.

Mitigations –

N/A

Next Steps (if any)

N/A

Declaration and Publication

I have read the Equality Impact Assessment and I am satisfied that it represents a fair and reasonable view of the expected equality impact of the measures implemented.

Signed:

Date: March 2022