An omicron grant scheme for businesses is a “drop in the ocean” that will fail to prevent a wave of corporate collapses, industry leaders warned on Thursday as councils prepared to distribute the funds.
Small companies struggling with the latest Covid outbreak are in line for grants of less than £3,000 each to help them through the pandemic, while larger firms get up to £6,000, with money sent from the Government to local authorities from Friday.
Michael Kill, chief executive of the Night Time Industries Association, said the funds for hospitality, leisure and accommodation firms are far short of what is needed given the scale of the omicron variant.
The average company in his industry lost £46,000 of sales and revenues in the run up to Christmas due to Covid, he said.
Mr Kill added: “Proportionately, it is borderline insulting for many of these businesses. £6,000 is a drop in the ocean.
“In the next couple of weeks, we are going to see the impact of that in terms of business failure and lost jobs.”
It came as a survey from the Bank of England revealed that 4pc of workers were absent last month – up from 3pc in November and the highest level since the pandemic began.
Companies whose premises have a rateable value of £15,000 or below under the business rates regime are in line for £2,667 each from the new grant programme. For those between £15,000 and £51,000, the grant is £4,000, while larger firms will get £6,000.
Mike Cherry, national chairman of the Federation of Small Businesses, said the support was welcome, but “amid so many other challenges, Government should be doing more”.
He added: “Some businesses have unfortunately seen a far larger drop in revenue over the festive season than initially anticipated.”
Businesses estimated that the pandemic has cut employment by around 5pc compared to their expectations if Covid had never erupted.
Infections and self-isolation are compounding the already severe shortages of staff, according to a survey of companies by the Office for National Statistics (ONS).
At the end of the year, 15pc of businesses reported a shortage of staff, continuing the pressure felt since October. The situation is worst in hospitality, as 37pc of accommodation and food services businesses said they are struggling with a lack of staff.