The Coronavirus (Extension And Expiry) (Scotland) Act 2021: report to the Scottish Parliament (September 2021)

2. Section 5(1)(b) – measures to help businesses

2.1 Section 5(1)(b)(i) requires Ministers to provide information about the Extension and Expiry Act on measures in place to help businesses to deal with the effects of disruption attributable to Covid-19.

2.2 By virtue of section 5(2)(b), the report must include information on the measures in place to help businesses deal with the effect of disruption attributable to Covid-19 and any plans for further measures the Scottish Ministers propose to put in place to help businesses.

Measures to help businesses

2.3 The Scottish Government is focused on optimising support for businesses while closed or restricted by regulations. With the easing of legal restrictions businesses can now trade. The Scottish Government recognises that even with the full reopening of the economy, this is still an extremely difficult time for many businesses across Scotland.

2.4 Since the start of the pandemic, businesses have directly benefitted from more than £3.7 billion in support: £2.8 billion in grants and £965 million through Covid -19 Non-Domestic Rates (NDR) reliefs.

2.5 The Scottish Government extended the anti-irritancy provisions in respect of commercial leases contained in the Act until 31 March 2022. This prevents tenants from being evicted for non-payment of rent for a period of 14 weeks as opposed to the pre-Covid requirement of 14 days' notice. This support works in conjunction with the Code of Practice for commercial property relationships to give sufficient time for landlords and tenants to come to mutually beneficial agreements as to rental reductions, holidays and deferments or lease restructuring.

2.6 Consideration is also being given as to how to treat any accrued rental deficits, possibly through binding arbitration following legislation to be introduced by UK Government

Rateable Value based support for businesses in the Retail, Hospitality and Leisure Sectors

2.7 The majority of the financial support - £2.1 billion - made available to businesses since the outset of the pandemic has been distributed to those that operate from premises which are liable for NDR. This is due to the fact that businesses which pay NDR, specifically those in the retail, hospitality and leisure sectors, have been most directly impacted by Covid-19 having been subject to specific restrictions requiring them to either close or placing specific restrictions on their operations. The financial support made available to such businesses is not intended to cover costs or losses but to help them be resilient. That said, the levels of awards made available have varied depending on the size of the business and the scope and period of restrictions in place. Rateable Value based schemes that have been introduced since March 2020 include:

• Retail Hospitality and Leisure Grant and Small Business Grant Scheme (March 2020);
• Covid-19 Restrictions Closure and Hardship Fund (October 2020);
• Strategic Framework Business Fund (November 2020 – March 2021);
• Hospitality, Retail and Leisure Top up (January 2021); and
• Strategic Framework Business Fund Transitional Payment and Business Restart Grant (April 2021).

Non-Domestic Rates relief

2.8 The Scottish Government has extended 100% NDR relief for all retail, leisure, aviation and hospitality premises, for 2021-22, alongside other measures such as a reduction to the poundage. This is in addition to the 100% Rates Relief that the Scottish Government extended to businesses in receipt of the Small Business Bonus Scheme in the 2020/21 Financial Year and collectively ensures that Scotland offers the most generous NDR regime in the UK.

Sector-specific support

2.9 In addition to specific financial support schemes for businesses that pay NDR, the Scottish Government has also introduced a number of bespoke schemes for businesses and sectors that have experienced particular challenges as a result of Covid-19. This includes £100 million for culture and the creative industries, £42 million for tourism, £53 million for the wedding and events sectors and £22 million for food and drink.

2.10 In addition, £120 million was allocated to the Local Authority Discretionary Fund which enables local authorities to direct financial support to where it is needed most based on their assessment of the challenges faced by local economies and their business communities.

Future Business Support

2.11 The Scottish Government has used all of the consequentials allocated by the UK Government for the purpose of providing support to businesses impacted by Covid-19. Without further consequentials, the Scottish Government will be unable to provide further support to businesses experiencing ongoing financial challenges as a result of Covid-19.