UK chancellor Rishi Sunak has pledged a £350bn lifeline to help battle the economic fallout from the coronavirus pandemic, including a series of measures designed to help big firms as well as small and medium businesses. However, independent agencies across ad land are still seeking more clarity and assistance from the government.
Backed by £20bn in direct aid, the suspension of business rates and grants for the hard-hit retail and drinks sectors, the measures aim to tide the economy through a period of unprecedented challenge in which many will be forced to stay indoors.
Ripping up the economic rulebook, Sunak has also promised unlimited support, proportionate to the severity of the ultimate impact with tailored packages for the hardest-hit sectors such as airlines and airports - just five days after putting his budget to the country.
Among the first to benefit will be the hospitality sector where a business rates holiday has been implemented, backed by grants of between £10k and £25k for small businesses. Individuals in immediate financial difficulty will also be permitted to take a three-month mortgage ‘holiday’ by their lenders.
The unprecedented aid package does not go far enough in the eyes of some indie advertising firms however, with many demanding stronger leadership and greater clarity from the government on other issues that affect their operations.
Lawrence Weber, a partner at indie consultancy Curve, explained: "As a small, fully remote business, two of our biggest concerns are to keep paying salaries – which it seems yesterday's announcement will help – and to make sure our amazing network of freelancers are safe too – something the government need to provide much more clarity on.
"Potentially the biggest challenge in this period though is maintaining everyone's mental health. Not the job of a budget perhaps, but something we'd like to see some advice and leadership on from someone too."
Amelia Torod, co-founder of indie brand consultancy The Fawnbrake Collective, said the financial measures from the government were a great start but didn’t help a business like her own in “the right ways”.
“The relief was centred around business rates which is not an issue to us as we don't have offices. We don't want to be taking out loans and getting into debt. Small businesses need tax relief and a VAT holiday now,” she added.
“For us it's about how can the government help us minimise our out-goings so that our business can weather this. Already on Wednesday morning (18 March), one client which we had hoped to be working with just announced that they were laying off all 600 staff, so there’s no project for us to work on.
“When clients don't know if they will have a business in three months’ time, thinking about a brand isn't the priority."
Stephen Woodford, chief executive at the Advertising Association (AA), warned that this was only the beginning.
“We welcome the business support measures announced today that should help keep people employed and businesses functioning during this unprecedented period of economic and social disruption. We also recognise the government’s ‘whatever it takes’ commitments to keep these measures under review and that more may still be needed to help the UK economy keep functioning.
“We are particularly conscious of the high proportion of SMEs in our industry and the intense pressure they are under to maintain service and retain staff.
"Measures such as the government-backed loans announced today are needed to help these firms manage their cash flow to survive and play their part in the recovery. They are vital to UK advertising’s capabilities which is a proven engine of the economy.”
The economic impact of Covid-19 on the global economy has been severe with much of the world shutting up shop for weeks, presaging an inevitable slump in output which will all but inevitably spell a severe recession.
The specific impact on the advertising economy has yet to be quantified but economists such as IAB Europe’s Daniel Knapp now foresee an event comparable to the 2008 credit crunch.