First Minister Mark Drakeford has today announced a new £500m fund to provide extra support to the Welsh economy, businesses and charities experiencing a sharp drop in trading as a result of the coronavirus pandemic.
The Economic Resilience Fund aims to plug the gaps in the support schemes already announced by the UK Government, including the Job Retention Scheme and the Self-Employed Income Support Scheme, which will guarantee 80% of people’s wages and income.
The new £500m Welsh fund will support firms of all sizes, including social enterprises, with a focus on those which have not already benefited from the coronavirus grants already announced by the Welsh Government.
First Minister Mark Drakeford said:
“The pace at which the coronavirus pandemic is affecting our economy is extraordinary. Now, more than ever, government needs to do all it can to support the economy and business.
“The recent announcements by the UK Government provided some much-needed protection for many workers and their families in Wales. Only the UK Government has the macro-economic and fiscal levers to minimise the enormous damage this economic shut-down will do to the UK economy.
“But even with these interventions, there are elements of the economy, businesses and charities in Wales facing insolvency because fixed and operating costs – rent, residual salary costs, leasing charges for vital equipment and maintaining operations – cannot be met during this crisis.
“We made a commitment as a Welsh Government to fill the gaps and support the economy and businesses through this incredibly difficult time.
“This package of support provides further assurance to firms, charities and social enterprises that we will do just that – help them deal with the economic impact of the pandemic.”
The £500m fund is made up of two main elements:
- A new £100m Development Bank of Wales fund will be available for companies experiencing cash flow problems as a result of the pandemic and will provide loans of between £5,000 and £250,000 at favourable interest rates.
- Businesses will also be able to benefit from a £400m emergency pot providing:
- Grants of £10,000 for micro-businesses employing up to nine people. This includes sole traders employing staff. Qualifying businesses will be able to apply by mid-April.
- Grants of up to £100,000 for small and medium sized firms with between 10 and 249 employees. Qualifying businesses will be able to apply from next week.
- Support for larger Welsh companies, which are of critical social or economic importance to Wales. This element will be open to qualifying businesses within the next two weeks.
The £500m Economic Resilience Fund will support businesses forced to temporarily cease trading – to go into “hibernation” – or which need cash-flow support to adapt to a remote way of working.
The new fund builds on the £1.4bn business support package announced by the Welsh Government on March 18, which provides a year-long rate relief holiday for all but the largest premises in the retail, hospitality and leisure sectors and grant-support for more than 70,000 small businesses.
Ken Skates, Minister for the Economy, Transport and North Wales, said:
“This £500m package will provide further vital assistance to thousands of firms and third sector organisations, which normally rely on trading income.
“We have been very clear, we are here to support the economy and the business community. We stand with every business and worker. Together we will get through this exceptionally challenging period.”
Responding to the Welsh Government announcement on £500million Economic Resilience Fund, Ben Francis, FSB Wales Policy Chair, said:
“Many businesses will feel reassured by the grant funding announced by Welsh Government this afternoon. Welsh Government made a promise to go above and beyond the level of support offered in England, and they have.
“This increased grant funding will provide a safety net for those businesses who will not have benefitted from the initial round of grants, and demonstrates that Welsh Government has sought to fill those gaps. We were also pleased to see a particular focus on social enterprises, which until now had not been a large part of the conversation. This will help ensure that those businesses can make it through this disruptive time.
“The emphasis for the Economic Resilience Fund must now must be on delivery; ensuring that the detail of this fund is made available to those eligible for it, and making sure that the money gets out of the door as quickly as possible, so that it can start to have an impact on the ground.
“This is reassuring news for businesses, and for the Welsh economy. We must now turn our attention to how we can fill other gaps, including for those that are recently self-employed.
“Once we come out of the other side of this crisis, Wales will need our entrepreneurs to be innovating and stimulating our economy. Those businesses need us now, and we are encouraged to see that Welsh Government has introduced such a strong package today.”
Ian Price, CBI Wales Director, said:
“The economic resilience fund will be welcome news for Welsh enterprise. During this unprecedented time it’s vital support for businesses – large and small – gets to where it’s needed most, and fast. More may be needed as the situation develops.
“Meanwhile firms will continue to do their best by their employees, adapting quickly to new guidance and helping national efforts by supplying essential goods and services.
“Longer term, close cooperation and communication between business, unions, devolved and national governments will be essential to ensuring as many firms as possible can emerge from hibernation intact once the pandemic passes.”
Lloyd Powell, head of ACCA Wales, said:
‘We welcome the proposals announced today by the Welsh Government during what is a regional, national and global emergency.
‘The economic response from Government has been swift and very welcome at a time of huge uncertainty for micro, small and medium sized businesses and the millions of people they serve, employ and trade with.
‘With unprecedented economic stimuli being released to support the Welsh and the UK economy, it is encouraging the Welsh Government is attempting to demonstrate fiscal prudence by using cash reallocated from existing budgets and indeed new money from the UK Treasury.
‘We await further schemes being announced throughout the week, it is important government continues to be receptive to the needs of business and acts as a vital safety net throughout the Coronavirus pandemic – however long its duration.’