Written by Ged Cosgrove, group managing partner
As we find ourselves entering a new phase of tiered lockdown, it would be wise to assume that life will not return to normal any time soon. Talks of vaccine progression had many excited about a sprint finish to the end of the year and perhaps an end to Covid-19, but recent announcements from the Government have made it clear that it’ll be springtime at the earliest before we can expect that.
In the last few weeks, it’s been announced that CBILS applications are now being welcomed until the end of 2020, and the furlough scheme has been extended to the end of March. Both these things suggest the Government isn’t expecting a quick fix to the pandemic and is preparing to provide the country with longer-term support measures.
The Government is taking several steps to protect industries, where possible, by creating new jobs. In the latest spending review, Chancellor Rishi Sunak announced that the core health budget will grow by £6.6bn, which will help to hire 50,000 new nurses. The £2.6bn Restart scheme will support those out of work for 12 months or more back into employment, while the £1.6bn Kickstart budget will subsidise jobs for young people. There will be a new £4bn ‘levelling up’ fund introduced to finance local infrastructure improvement projects, as well as a new centre dedicated to artificial intelligence – both of which will go on to create new roles up and down the country.
This all comes at a cost, though. It’s predicted that UK borrowing next year will reach almost £400bn – the largest level in peacetime. Sunak predicts long-term economic ‘scarring’ as far as 2025. There is certainly no sprint finish to the end of this worldwide catastrophe – we are in a marathon and need to be prepared for the long-term impact.
That said, my understanding from talking to many clients is that – with the exception of those that have been forced to close – there is great spirit, and many are determined to keep going throughout this crisis, working to a new normal. What has emerged throughout the pandemic is an opportunity for businesses to streamline and refine their operations and save costs wherever they can. Remote working has made businesses reconsider their entire overheads, from rent through to waste disposal, while the furlough vs redundancy debate is now even more crucial to wider strategy. Businesses are taking advantage of the support available from Government, with many commenting that they have been able to operate profitably, with a newer, leaner business model.
So, perhaps, although serious changes have had to be made and businesses are reviewing their practices on a continual basis, this has been one huge lesson in efficiency and futureproofing. We must look for a silver lining somewhere and being forced to become agile and utilise modern methods of working may just be it.