To date, only 13 per cent of the £1.6bn Additional Restrictions Grant (ARG) monies available to local authorities has been allocated to businesses desperately in need.
Feedback from the sector after the Budget has been that whilst many were grateful for the various grant announcements, it could very much be a case of too little too late if businesses do not receive funding urgently.
Richard Lambert, chief executive of the NHBF says, “We highlighted in our evidence to Government that salons are literally on the brink of permanent closure, unable to take on any more debt to meet the deficit between their fixed outgoings and the current grants and reliefs. Without an immediate cash injection, many will not make it to the point of reopening.
“The frustrating thing is it doesn’t have to be this way. There is a significant pot of money available to struggling businesses via the Additional Restrictions Grant, which central government has given to local authorities to hand out. The problem we have is that councils have been holding on to this money or setting the eligibility criteria too narrowly, meaning that the money is not getting to those that need it.”
The National Hair & Beauty Federation, along with the British Beauty Council, British Association of Beauty Therapy & Cosmetology and the UK Spa Association, has written to the Secretary of State for Ministry of Housing, Communities and Local Government. The group are urging the government to push local authorities to expand their current eligibility criteria for ARGs to cover more struggling businesses and speed up the fund allocation process to get this money through to people as soon as possible.
Last week, Chancellor Rishi Sunak outlined in his Budget that local authorities must spend the £1.6bn fund in order to receive a further £425m cash-injection. The group representing the Personal Care sector welcomed the Restart Grants but was “bitterly disappointed” the Chancellor did not cut VAT for hair and beauty businesses despite the COVID Coalition showing the move could be cost neutral for the Treasury. They remain committed to campaigning for better recognition and support for the Personal Care sector.
PERSONAL CARE SECTOR IN CRISIS:
• More than 10% of the sector has already closed its doors for good since the pandemic.
• 60% of businesses have no cash reserves (up from 27% in 2019).
• The average business has lost 45% of 2019 turnover (up to 59% in some areas).
• Even when open, social distancing restrictions mean salon capacity is down to 70%.
• 1 in 8 business owners have already made redundancies as a result of the pandemic.
• More than half have been forced to cut staff hours in order to save costs.