What have we learned?
A little over ten years ago our sector (the built environment) was hung out to fend for itself in the aftermath of the global financial crisis (GFC) and we are still suffering the after effects all these years later. At the time there was the inference that we were part of the problem, too close to the banks (some of whom were too heavily embedded in the developers and developments they were funding). Back then as the effects of the financial meltdown began to take hold, we played by the rules, fought tooth and nail to pay our bills, keep our teams together and stay afloat ready for the upturn which never came. There was precious little support and despite having some of the largest professional bodies representing us, we failed to speak with one voice. The corporates did just fine of course, hunkering down, consolidating globally and jettisoning excess staff in round after round of redundancy. Great staff at a great point in their careers, ready to train, mentor and guide the next generation of surveyors, engineers and architects. Many today are the sole trading consultants who will again be feeling the harsh effects of this current crisis.
In the meantime, these multi nationals, corps and mini corps have made a fine job of driving the value of our business through the floor, embracing procurement strategies that value price over professional and technical expertise and competence, volume over quality. As a result, there is very little resilience to meet the financial challenge this time round. We collectively need to learn that businesses need to be sustainably profitable so when winter comes around, we can survive and thrive.
As this current crisis plays out, it does so first in another sector, the travel, tourism, hotel and hospitality sector and it looks all too familiar for my liking. The possible difference might well be that the underlying economic principles are strong and so business will bounce back after a (hopefully short) painful period of enforced quarantine. It may also be that, in stark contrast to our own sector (the RICS provides little practical support to members nevermind calling for government support) this sector is speaking with one voice. The Scottish Tourism Alliance (STA) today set out its call to the Scottish Government making it quite clear what needs to be done now to safeguard jobs and make sure businesses are here on the other side ready to pick up and forge on, rebuilding and strengthening our economy so it can meet the next existential challenge, which for our sector, is the climate change emergency and decarbonising the built environment.
So, in a shameless copy of the STA’s demands for the hospitality and tourism sector, I call on the Scottish and UK governments to put in place the following support for all small and medium sized business in the UK:
Summary of immediate asks of businesses
- Scrapping of all business rates/local taxes for all businesses for 2020.
- Deferring all corporation tax, VAT, PAYE and other tax payments for 12 months.
- Significant emergency loan funding for all affected businesses (as Germany is already doing).
- Paying % of the lost wages of employees on reduced time or temporary layoffs (As Germany & Denmark are doing)
- Providing full benefits and support to all staff who are temporarily made redundant immediately.
- Requiring the banks and landlords to offer all affected employees and businesses repayment holidays of up to 12 months on mortgages, loans, rent etc. – maybe to ease with Scot Govt guarantees
- Use the Scottish Investment Bank to support now
- Delay introduction of any and all new business regulations until impact of CV19 fully understood and dealt with
- Encouraging suppliers, such as utilities providers, to offer deferred payments terms to businesses;
- Look at all core imposed costs into business that have continued to rise and reverse out/stop
- Push the banks hard to be supportive of businesses experiencing unexpected trading difficulties and provide Scottish Government guarantee
- Commercial landlords must be encouraged to defer rent payments with Government guarantees as necessary
- Establish a SG underwritten business support fund to provide emergency cash flow via zero-interest loans and non-repayable grants
- Commit to review business rates on similar terms to proposed UKG review
- Although a reserved matter, Scottish Government to press UKG for reduction in VAT on maintenance and repairs to existing buildings to 0% in line with the advantage offered to New Build (or to 5% for all construction) to stimulate demand and support recovery – win/win for decarbonising the existing building stock which still needs to be done despite CV19
Managing Director #Coronovirus