Update on COVID-19 Omicron business support: letter from the Cabinet Secretary for Finance and Economy

To all MSPs,

31 January 2021

Update on COVID-19 Omicron business support

Following the emergence of the Omicron variant at the end of last year, we introduced necessary measures to control the spread of the new variant. We are acutely aware of the impact these measures have had on businesses during the key Christmas trading period. The combination of the booster vaccination, the measures introduced in December, and of course the willingness of the public to adapt behaviour, has helped stem the spread of Omicron.

The First Minister announced a support package for affected businesses totalling £375 million. This package includes £200 million reprioritised from the Scottish Government’s expected consequentials budget and £175 million made available by the Treasury. On top of this, we have reprioritised a further £4 million from existing Scottish Government funding for tourism and events.

As we have done throughout the pandemic, we have worked closely with businesses to understand the impact of the Omicron variant and the necessary restrictions introduced. Businesses asked us, where possible, to target funds at those most impacted by measures introduced in December, rather than blanket funding. It takes a bit longer to get these targeted schemes set up and therefore money paid out, but means businesses hardest hit will get more money.

We have already confirmed how the following funding will be allocated:

• £66m for hospitality businesses impacted by the cancellation of Christmas parties
• £32m for eligible hospitality and leisure businesses due to impact of physical distancing and caps on attendance
• £10m targeted support for hospitality businesses most affected by the requirement for table service
• £5m for nightclubs who are required to close
• £31.5m to cultural businesses, organisations, venues and independent cinema support and grassroots venues
• £19.8m support for the events sector
• £10m support to creative freelancers
• £2m to the National Performing Companies for Christmas losses and touring fund re-purposing
• £1.7m for museums, galleries and heritage
• up to £28m for the taxi and private hire sector
• £19m for close contact businesses such as hairdressers and beauticians
• £17m for food and drink supply chain businesses including wholesalers
• £9m for the worst affected businesses in the tourism sector
• up to £5m for the sport sector
• £3m for wedding sector supply chain businesses
• £1m for brewers
• £16m for existing public transport COVID-19 support schemes to recognise the impact on fare revenue

Decisions on the allocation of the remaining funds will be confirmed shortly following analysis and consultation with affected sectors on how it can best be targeted, particularly in light of requests for funding to focus now on recovery work.

Funding is being administered by local authorities, enterprise agencies and other delivery partners including Creative Scotland and VisitScotland. I’d like to thank all these delivery partners and their staff for the work they are doing to provide this essential support to businesses. 

Payments are already underway for the following funds:

• £66m Hospitality: December and January Business Support Top Up
• £32m Hospitality and Leisure: January Business Support Top Up
• £19.8m support for the events sector
• £10m Public House Table Service Fund
• £10m Cancellation Fund for Creative Freelancers
• £9m COVID-19 Business Support and Continuity Tourism Fund
• £3m Scottish Wedding Industry Fund Top Up

Payments begin this week from the £5m Nightclub Closure Fund, now that the application process is closed.

The following funds are open to applications, with payments made as quickly as possible:

• £15m food and drink supply chain – Wholesalers Fund
• £2m food and drink supply chain – Producers Fund
• £31.5m COVID-19 Cancellation Fund for Cultural Organisations
• £28m Taxi and Private Hire Driver and Operator Support Fund 2022
• £1m Scottish Brewers Support Fund 2022

The £1m Museums Recovery Fund, administered by Museums Galleries Scotland, will open in early February.

The £19m Close Contact Services Fund will open and start paying businesses in February with payments completed in March. The Scottish Government has been working with industry representatives to understand how best to target this funding to ensure it reaches businesses that have been most affected, as requested. As this sector includes many businesses that do not have premises, we cannot rely on registration for non-domestic rates as a way of validating business details which has been an important anti-fraud measure for other schemes. Without this, we need a more thorough administrative process. We have started a procurement process through an existing framework set up by Scottish Enterprise to administer this grant scheme.

Guidance and eligibility criteria for all funds where businesses are required to complete applications or declarations have now been published.

Some funding is being dispersed through existing grant or contractual arrangements:

• £16m for public transport will be made available through existing arrangements based on actual operator costs and revenue received
• £0.7m for museums and galleries will be paid through existing grant arrangements
• £2m for national performing companies will be paid through existing funding arrangements
• up to £5m for sport has been allocated through grants to sport governing bodies and through SportScotland with money already reaching sports clubs

As with all our previous business support funding, the Scottish Government will publish management information on funding paid out to businesses. The first set of data showing payments up to 21 January will be published this week.

I hope this update is helpful.

Kate Forbes