The FSB Small Business Index (SBI) for the South East, which measures confidence amongst businesses, has fallen in Q4.
The index score now sits at -37 after having been at -32 in the last quarter.
The uncertainty in confidence witnessed amongst South East small businesses is apparent across the country, with index scores among all regions in negative territory. That being said, South East small businesses at -37% are slightly above average when compared to the rest of the country, as the national average stands at -47%. The outlook for future revenue remains in negative territory in the South East at -33% but is not quite as pessimistic as the UK average -39%.
In Q4 2020, 44% of small businesses in the South East said that their aspirations in the next 12 months were to grow either rapidly (increase turnover/sales by over 20%) or moderately (up to 20%). However compared with this time last year, small businesses are more than twice as likely to report an aspiration to downsize, close or sell their business (23% vs 10% at Q4 2019).
The employment picture amongst FSB members over the preceding 3 months showed that 21% had decreased staff numbers, while 7% had increased their employment levels. The actual decline in staff numbers seen in Q4 is greater than what was predicted to be the case in the previous quarter (15%). Over two-thirds of small business staffing levels have been unaffected as 68% reported these as having ‘stayed the same’. For the next quarter, the intention is for 11% of businesses to increase their headcount and 14% to decrease staff numbers.
FSB Hampshire & Isle of Wight are calling for:
- Small Business Cash Grants to be more streamlined and payed quicker as many small firms are desperately relying on these funds. We need authorities to adjust the schemes to be based on the number of businesses within a borough rather than the number of residents.
- Directors Income Support Scheme – a taxable grant for directors of limited companies calculated at 80% of three months average monthly trading profits, paid out in a single instalment and capped at £7,500. This would mirror the existing framework offered by the Self-Employed Income Support Scheme (SEISS), avoiding the issues around dividends.
- Help for more recently self-employed – an extension of the Self-Employed Income Support Scheme at the end of January 2021 after the final date for self-assessment tax returns, to include the use of a 2019/20 tax return in time to qualify for the SEISS fourth Grant. This would help around 300,000 newer self-employed people who were left out of previous SEISS rounds.
- Emergency loans extension – greater financing ability for those who have used their allocations through Bounce Bank Loans, extending the period before repayments begin, and a student loans approach for debt repayment which means that loans are only paid when the company is profitable and can afford to do so.
- Extend the business rates relief scheme to businesses told they must close under Covid rules throughout 2021.
- Provide targeted support to night-time economy businesses, such as nightclubs, which have been unable to open since March.
Nicola Bailey, FSB Development Manager for Hampshire & Isle of Wight, has said:
“The Small Business Index (SBI) shows how the ongoing impact of Covid-19 is taking it’s toll on our small businesses . Government must recognise the huge contribution that Hampshire & Isle of Wight small businesses make to the UK economy and concentrate on policies that will shore up business confidence in the short term.
Article continues below this advertisement “Access to finance and debt accumulation are significant concerns and so Government must put in place a bold business support infrastructure as many cannot wait for a March Budget”.
