Publication - Impact assessment

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

Published: 11 March 2022
From: Director-General Economy
Topic: Business, industry and innovation, Coronavirus (COVID-19) in Scotland, Economy
ISBN: 9781804351864

Detailed equality impact assessments (EQIAs) for the COVID-19 business support funding issued between March 2020 and April 2021.

Supporting documents

The Pivotal Enterprise Resilience Fund (PERF)

Name of Grant:

The Pivotal Enterprise Resilience Fund (PERF)

Policy Lead

Legal power used:

Overarching legal powers to take emergency action due to Covid-19

Grant Overview:

Managed by the Enterprise Agencies, bespoke grants and wrap around business support for viable but vulnerable Small and Medium-sized Enterprises (SMEs) vital to the local or national economic foundations of Scotland.

The PERF recognised the ongoing financial hardship that many SMEs experienced as a result of COVID-19.

Whilst being sector agnostic, it was designed to support a particular type of pivotal small and medium-sized business. Successful applicants were able to provide evidence of, or demonstrate impact in, one or more of the following areas:

Supporting Scotland’s productive capacity – through wage levels, employment, exports, Research & Development and innovation
Local economic importance which would include areas such as, employee numbers relative to place, delivery of essential services, wider economic and community value, plus the socio-economic importance of the business in remote and rural areas
Leverage on wider business community by demonstrating the impacts of your business on supply chain at a local, regional and national level
Being a supplier or potential supplier to NHS or other COVID-19 vital services
Being a supplier to other essential businesses
Demonstrating a need to rapidly scale up or diversify due to COVID-19.

The application process allowed each applicant to make clear their contribution to the economy and their community.

Due to demand the PERF received, £75m in additional funding post-launch, taking the total fund allocation to £120m.

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.

Since the start of the pandemic, the Scottish Government has spent £4.4 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 PERF was no exception to this. Within this context, there has been limited opportunity to gather evidence on the possible impacts of the business support fund. However, from the start of the pandemic, the Scottish Government has considered the lockdown provisions against the needs of the general equality duty as set out in section 149 of the Equality Act 2010 to eliminate unlawful discrimination, harassment and victimisation, advance equality of opportunity between people who share a protected characteristic and those who do not, and foster good relations between people who share a protected characteristic and those who do not. The Scottish Government has also considered whether the measures could constitute direct and/or indirect discrimination.

In many cases, the provisions have applied to all persons irrespective of protected characteristic, although it is acknowledged that the same provision may not have equal impacts.

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. However, the Scottish Government completed an Equality Impact Assessment on the Strategic Framework to assess the policy impact on diverse groups and individuals, and this overarching EQIA provided the context in which the business support grants, including PERF, were developed.

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

By distributing financial support through these funds, the Scottish Government acted to mitigate the impact of these regulations on businesses to support them in remaining financially viable while restrictions were in place. In doing so, this assessment shows that the funds acted to advance equalities by protecting businesses in sectors that impact on the lives of those with protected characteristics disproportionately.

As at March 2020^[41], there were 361,875 SMEs operating in Scotland, providing an estimated 1.2 million jobs.

The PERF provided support to viable but vulnerable SMEs, protecting their income and helping to advance equality of opportunity by ensuring their survival through the pandemic. We sought to mitigate any negatives identified by ensuring all relevant networks signpost the fund to make sure it has the maximum impact.

Age: Older People and Children and Young People

There is extensive research on the detrimental impacts of restrictions introduced to control the spread of Covid-19 on children and young people. Particular attention has been paid to the impact of restrictions on the incomes and career prospects of young people both of which have been specifically recognised by the Scottish Government. Employment figures published by the Office for National Statistics (ONS) show the extent to which the impacts of Covid-19 on the labour market in Scotland have fallen disproportionately on young people.

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 Studies (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.

Sex: Men and Women

An assessment of the restrictions introduced at this time similarly shows that, like young people, these also had a disproportionate impact on women primarily driven by two factors, high numbers of women-led businesses in the retail, hospitality and leisure sectors as well as a clustering of female employment within these sectors.

According to the Small Business Survey, in 2018, 15%^[42] of SME employers were women-led (controlled by one woman or have a management team of which a majority are woman) and 73% of SME employers were family-owned.

Race

We do not have statistics breaking down race, however, according to the Small Business Survey, in 2018, 2%^[43] of SME employers were minority ethnic group led.

Consultation with stakeholders revealed the importance of tailored support for the SME sector during the pandemic in order to mitigate the economic impact of this unparalleled crisis. Our main concern was to design a funding scheme that would be inclusive for each SME, provided they were able to evidence meeting the criteria.

As this fund contributed to maintaining the financial viability of SMEs it is thought that this will also act to preserve jobs for a wide range groups.

Disability

Due to the intent of this Fund to cover a wide range of SMEs, it is difficult to acquire disability data on it as a whole. However, the below data indicates there is a potential for a marginally different positive impact on non-disabled groups via this fund:

In 2019, the employment rate for those classed as disabled under the Equality Act 2010 was 49.0 per cent which was significantly lower than the employment rate for non-disabled people (81.6 per cent). In 2019, the disability employment gap was 32.6 percentage points.
The disability employment gap was lower for women (27.5 percentage points) than men (38.2 percentage points) for ages 16 to 64 and across all other age bands. The disability employment gap was lower for young people and increased with age, with the gap being highest for those aged 50 to 64 years, for both women and men^[44].