HomeInsightsGovernment unveils £1bn support package for Omicron-hit businesses

Government unveils £1bn support package for Omicron-hit businesses

Chancellor Rishi Sunak announced a new series of measures just before Christmas designed to support UK firms that have been impacted by the Omicron Covid variant.

Businesses in the hospitality and leisure sectors in England are now eligible for one-off grants of up to £6,000 per premise. A £100 million discretionary funding is now available for local authorities to support other businesses.

The government will also cover the cost of Statutory Sick Pay for Covid-related absences for small and medium-sized employers across the UK.

On top of that, £30 million will be made available through the Culture Recovery Fund, enabling more cultural organisations in England to apply for support during the winter.

Around 200,000 businesses are eligible for business grants, which are being administered by local authorities.

Government ‘stepping back in’

The Chancellor said: “We recognise that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time.

“So we’re stepping in with £1 billion of support, including a new grant scheme, the reintroduction of the Statutory Sick Pay Rebate Scheme and further funding released through the Culture Recovery Fund.”

To support other businesses impacted by Omicron – such as those who supply the hospitality and leisure sectors – the government is also giving a more than £100 million boost to the Additional Restrictions Grant (ARG) fund for local authorities in England.

Local authorities will have the discretion to allocate this funding to businesses suffering most from the Omicron variant. The ARG top-up will be prioritised for those local authorities that have distributed most of their existing allocation. This is in addition to the £250 million of previously allocated funding that remains with local authorities.

SSPRS reintroduced in light of Omicron

As increasing numbers of Covid-19 cases means more workers taking time off work, the government is also reintroducing the Statutory Sick Pay Rebate Scheme (SSPRS).

The SSPRS will help small and medium-sized employers – those with fewer than 250 employees – by reimbursing them for the cost of Statutory Sick Pay for Covid-related absences, for up to two weeks per employee. Firms will be able to make claims retrospectively from mid-January.

Funding made available for entire of UK

The UK government is working with counterparts in the devolved administrations and businesses across all parts of the UK. As part of this support announced on 21 December, the devolved administrations will receive around £150 million of funding through the Barnett formula, comprising around £80 million for the Scottish Government, £50 million for the Welsh Government and £25 million for the Northern Ireland Executive.

This contributes towards the £860 million of further funding announced by the UK government in December to support the devolved administrations, allowing them to provide additional support to businesses in Scotland, Wales and Northern Ireland as they see fit.

These additional measures will reinforce the existing package of business support, including:

  • Business rates relief, meaning that the majority of businesses in the hospitality and leisure sectors will see a 75% reduction in their business rates bill across the entire financial year and a new 50% capped business rates relief next financial year.
  • A 12.5% reduced rate of VAT for hospitality and tourism to support the cash flow and viability of around 150,000 businesses and protect over 2.4 million jobs, until the end of March.
  • The £1.5 billion Covid Additional Relief Fund for businesses that have not previously had business rates support.
  • Businesses will be protected from eviction if they are behind on rent on their premises, thanks to the moratorium in place until March 2022.
  • Bounce Back Loan repayment flexibility, with borrowers having the option to take a six-month repayment holiday, three six-month interest only periods or extend their loan to 10 years, which almost halves the monthly payment.
  • Support for the aviation and travel sectors, including over £12 billion since the beginning of the pandemic, and the Airport and Ground Operations Support Scheme (AGOSS) until the end of March 2022.

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