The recently announced £40m Stormont grants scheme excludes sole traders and many social enterprises whicg could mean that thousands of those most in need who have been fighting to survive will now sink. The real irony is that these are the very businesses which are most in need and also most needed. Many social enterprises and sole traders are at the front line of service provision. Many are providing much needed services to local communities while others are likely to be the last allowed to reopen like barbers and hairdressers.
Social enterprises or chritable businesses reinvest their profits for a social purpose, they are often the trading arms of local community and voluntary groups which not only provide vital services but also a revenuwe stream for many worthy causes. Sole traders have been hardest hit not benefitting from previous schemes, and since many are new start-ups or have high overheads in early years the profits on which present calculations for support are based are low.
The new scheme, announced two weeks ago, excludes social enterprises with charitable status and those that get less than 60% of revenue from trade in goods or services.
Colin Jess, director of Social Enterprise NI, said: “Our members trade as businesses and we have asked for parity with other businesses.” He said that ruling out enterprises with charitable status was the biggest problem and had caused dismay across the sector. “The additional criteria of ruling out those with charitable status shows a misunderstanding of the business model,” he said. “If all other criteria are met, they should be able to access the fund.”
The Department for the Economy said the decision to exclude enterprises with charitable status was taken because there will be a separate Department for Communities fund of £15.5m available for charities. This again will exclude sole traders and widen the gap. Claims that this is to prevent potential duplication and ensure that the various support schemes cover as many businesses as possible do not hold water.
To qualify businesses must have employed between one and nine people on 29 February. However, businesses where the sole employee is the business owner or director do not qualify. The business must also be able to show that since 1 March they have suffered a reduction in turnover in excess of 40% as a direct result of pandemic or associated government restrictions.
It is clear that urgent support must be directed to those most in need before large sections of the economy are wiped out and a generation of entrepreneurs ruined and deterred. This is an area where the Stormont government must act quickly.
