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Rishi Sunak

Sunak reveals £1bn support for Omicron-hit businesses


Chancellor Rishi Sunak announced a package of one-off grants, statutory sick pay support and further funding for the arts and culture, as the rise in the Omicron variant empties hospitality businesses and theatres in the week before Christmas.

21st Dec 2021
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Since the government upped Covid alert levels and deployed Plan B, UK businesses in arts, culture and hospitality have urged the Chancellor to provide financial support during what would have been the most profitable time of year for these sectors. 

Sunak answered their calls today with a £1bn support package for Omicron-hit businesses. The new measures include: 

  •  One-off grants of up to £6,000 per premises for hospitality and leisure businesses
  • The reintroduction of the Statutory Sick Pay Rebate Scheme for Covid-related absences for small and medium-sized employers; and 
  • £30m further funding will be made available through the Culture Recovery Fund.

Announcing the latest schemes, Sunak said: “We recognise that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time. So we’re stepping in with £1bn of support.”

One-off grants

Roughly £683m has been earmarked in extra funding for hospitality and leisure businesses. Sunak has taken a similar approach to the January lockdown and is offering businesses in this sector a one-off grant of up to £6,000 per premises. 

As in January, the grants will again be based on the rateable value of the premises in three bands. 

Rateable value




Value of grant




Businesses eligible for these grants must be solvent and ratepayers in hospitality and leisure in England. The government guidance cited pubs, hotels, restaurants, bars, cinemas and amusement parks as example recipients. 

The funding comes as hospitality businesses have seen a spike in cancellations. Some businesses have reported losing around 40-60% of their December trade. 

The package is a little less than January’s grants of up to £9,000, but the government guidance notes that earlier in the year businesses were “fully closed”. 

There is no clear timeline on when businesses will gain access to funds, except that the grant will be administered by local authorities in “the coming weeks”. The government estimates that around 200,000 businesses will be eligible for this grant. 

Though the grants are up to £3,000 less than January’s offering, the government notes that many businesses have more cash in the bank than they did at the start of the pandemic and net cash deposits for all hospitality businesses have risen by £7bn (40%). Small and medium-sized businesses in the hospitality sector have seen their cash deposits rise by £2bn (79%).

Culture recovery, ARG and SSP

In addition, the Treasury opened up £100m discretionary funding to local authorities to support other businesses through the additional restrictions grant (ARG). The grant announced today is in addition to the £250m that local authorities still have to distribute. 

The press release specifies that the ARG top-up will be prioritised to the local authorities that have distributed most of their existing allocation. 

With the variant likely to quiet the panto voices and scale back West End audiences, the government added a further £30m to the culture recovery fund to support theatres, orchestras and museums in England until March 2022. 

As reported elsewhere on AccountingWEB, Sunak also announced the return of the Statutory Sick Pay Rebate Scheme (SSPRS).

The scheme is available for employers with fewer than 250 employees and will reimburse businesses for the cost of Covid-related absences for up to two weeks per employee. 

These grants have been set aside for England although the devolved administrations in Scotland, Wales and Northern Ireland will receive around £150m of funding through the Barnett formula.

Support already out there

These measures supplment the existing support such as the 12.5% reduced rate of VAT for hospitality, business rate relief, the Covid recovery loan scheme and a moratorium on business eviction for unpaid rent. 

But grants have been described as a “drop in the ocean” and “pitiful” by Blick Rothenberg CEO Nimesh Shah, who accused Sunak of paying lip service to impacted businesses. 

“The Chancellor could have been much bolder today without hitting the Treasury coffers too hard, by offering deferral for business rates, VAT and taxes to help cashflow,” said Shah.  

“Whilst the re-introduction of the furlough scheme was unlikely, the hospitality sector will have no choice but to cut jobs if they continue to see bookings drop off and the government should be aware of that likely result.”

Ben Steele, the owner of Steele Financial, said his heart sank when he heard Sunak's announcement of measures that were “papering over cracks”.

“It won't fix the issue in hand, and will NOT make up for the loss in revenue that hospitality are currently facing,” he said. 

Hargreaves Lansdown’s Susannah Streeter struck a similar tone, saying the grants “will amount to little more than a meagre sticking plaster for many larger businesses”.

“Many companies just don’t know how long customers will stay away, or whether fresh social distancing restrictions could be imposed in the New Year. The Chancellor again said nothing could be ruled out, adding to the dark cloud of uncertainty hanging over the sector,” she added.

The government is sticking with its Plan B approach for now and chose not revive the furlough scheme this time around. The Chancellor and the Prime Minister both encouraged people to get booster vaccinations to bring the virus under control. But if cases continue to surge and a circuit-breaker lockdown is announced, the Chancellor may have to return with further gifts for the hardest hit sectors.

“The Chancellor has to give businesses the clarity now around the available government support so that businesses can plan accordingly – today’s announcement was a lost opportunity to give that much-needed clarity,” concluded Shah. 


Replies (10)

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By Hugo Fair
21st Dec 2021 14:53

Has there ever been a more complex and less useful 'benefit' than this continuous tinkering with SSP?

Although there are those for whom 'anything is better than nothing', the paltry amounts are a wholly insufficient replacement to wages lost through being 'off work' (even where this is in order to isolate not because of direct infection) and are not enough to feed the family - let alone heat the home during the day as well.

And yet they keep tinkering with the rules under which SSP (and reclaiming it) operate during the pandemic ... almost as if they wanted to trip up the employer!

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Replying to Hugo Fair:
By GHarr497688
21st Dec 2021 15:57

Well lets not hold back . HMRC are massive organisation on chaos. In 40 years I have never seen it this bad. Did you see the open letter from HMRC saying how much they care and they are sorry they are behind. Funny because most small business cope ok.
Maybe time they were held more accountable !

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Replying to GHarr497688:
By kevinringer
22nd Dec 2021 12:30

HMRC will soon be fixed because (according to HMRC) MTD is going to cure everything don't you know? Ok, so they didn't actually say that, but HMRC have been blind-sided by MTD and now seem to think it will cure everything. The trouble is that it won't do a dot to address HMRC's admin problems which have just got progressively worse since Covid first kicked off. Take the helplines as an example. They used to open evenings and weekends pre-Covid. HMRC immediately stopped that leaving them open weekdays only. Now the VAT helplines are closed on a Friday too which means you can't get through on a Monday because that's the first day they're open after being closed for 3 days so they're overwhelmed with calls. The helpline people have told me they've had to close because they've got some items of post 2 years old still not yet dealt with. If taxpayers truly were customers they would take their business elsewhere but HMRC has a monopoly so we are forced to put up with them.

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By petestar1969
22nd Dec 2021 10:40

The panic about "omicron", aka the common cold, is getting out of hand now. None of these new measures should be necessary, we just need to get everything open and stop trying to scare people.

Really does make one wonder if there is a bigger agenda behind this.....

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Replying to petestar1969:
By philaccountant
22nd Dec 2021 10:50

Not to mention those 5G masts they keep putting up every where. I know what they're up to.

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Replying to philaccountant:
By petestar1969
22nd Dec 2021 11:06

Improving phone signals, they don't do anything else.

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Replying to philaccountant:
By alialdabawi
22nd Dec 2021 14:14

What they're not telling you is that 5G masts output a wave which will at a mass level, by roll-out date, alter the brain and the genome into believing that MTD is a panacea. There will be a crash in the stock price of receipt-spike wholesalers...

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Replying to petestar1969:
By DavidWinter
22nd Dec 2021 11:10

I spent a week in hospital with this 'common cold' - I'm relatively young and have no health issues whatsoever. What I saw in that ward was not merely old people dying of flu - and yes most of them were unvaccinated. Clients have had family die and one of my clients has had long covid for over a year - he has suffered the entire time. The 'agenda' is to stop this happening on a larger scale than it needs to be, despite the misinformation that's telling people it's part of the great reset or some such nonsense.

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By Jimess
22nd Dec 2021 11:02

This might be a silly question, but why just the hospitality sector? Other sectors are also experiencing problems due to the rapid growth of Omicron but I don't see any mention of help to other business sectors. Is it just a matter of who shouts the loudest?

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By ireallyshouldknowthisbut
22nd Dec 2021 11:42

Great for business owners

Hopeless for low paid staff

He who pays the piper, gets to call the tune.

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