A survey by the Association of Practicing Accountants (APA), with the support of East Midlands-based Duncan & Toplis, has shown that more than half of firms in the region have seen turnover reduce by more than 50% since the beginning of the lockdown.
Meanwhile, 44% have seen turnover reduce by more than 70%.
The survey of 1,018 businesses across the UK, including more than a hundred in the East Midlands has shed light on the critical challenges businesses face over the next three months.
The survey suggests:
- More than half (56%) of businesses in the East Midlands have seen their turnover reduced by 50% or more since the lockdown and with 44% having seen turnover reduce by at least 70%. This is slightly worse than the national average where 44% of UK businesses have seen turnover reduce by 50% or more, and just 33% having seen turnover reduce by at least 70%.
- 61% of businesses in the region have furloughed workers using the government’s Coronavirus Job Retention Scheme, which is similar to the national average. However, more businesses using the scheme in the East Midlands (70%) say it is “absolutely critical” for their ability to maintain staff, compared to the national average (63%).
- Nationally and in the East Midlands, fewer than 40% of businesses have enough cash in the bank to survive for longer than three months. 29% of businesses in the region do not have enough cash in the bank to survive longer than six weeks, compared to 26% nationally.
- A higher proportion of businesses in the East Midlands (27%) have applied for funding under the Coronavirus Business Interruption Loan scheme than the national average (16%). Of those who applied, 44% said the scheme worked well, compared to the national average of 16%
The Association of Practising Accountants (APA) is a network of leading professional and business service firms providing support to over 14,000 businesses across the UK.
Adrian Reynolds, Managing Director of APA member firm, Duncan & Toplis which co-commissioned the report said:
“This survey provides important information on the extent to which companies here and across the country have been affected by coronavirus and the government’s lockdown measures. The situation is clearly challenging, and it’s disappointing to see that businesses here may have been harder hit than in other parts of the country.
“If there is a positive side to this, it’s that businesses here have been able to take advantage of the support packages that have been made available and these are proving valuable in protecting jobs and keeping companies going. There is support being offered to a wide range of businesses and we are helping many of our clients to successfully secure this money. Things are tough, but we can help you get through this.”
Commenting on the findings APA Chairman Martin Muirhead said:
“These figures underpin just how grave the situation is for many owner managed businesses across the UK right now. Given how challenging the next few weeks are likely to be, government needs to direct the right resources where they are most needed.
“Our research suggests that furloughing, as well the HMRC’s Time to Pay scheme (including deferring VAT and related taxes) have been critical for the survival of many businesses and their staff and are working well. However, there remain real challenges with the various Government backed loan schemes on offer with many of our clients reporting confusion over assessment criteria or unacceptable delays from participating lenders.”
The research, which was carried out between 15th and 23rd April, included responses from 14 business sectors across 9 UK regions.