A major change to Scottish Government policy on support for Bed & Breakfast operators during the coronavirus crisis is being welcomed in the Western Isles.

Rhoda Grant MSP says: “This is a welcome move from the Scottish Government and it will help many B&B’s within the Highlands and Islands throughout this difficult time – albeit not for long.

“B&B businesses have been closed now for months and they will most likely miss the majority of their busy summer season, where most of these business owners earn a large portion of their yearly income.

Mrs Grant continued: “Should they have to remain closed, the Scottish Government will need to provide further help so that these businesses can open next season. I will continue to monitor the situation and I encourage anyone affected to get in touch.”

Na h-Eileanan an Iar SNP MSP Alasdair Allan has also welcomed the inclusion of small B&Bs into the Scottish Government Business Support Fund.  “This is a very welcome and important expansion of the Scottish Government’s Business Support Fund.

“B&Bs are a major part of the tourism sector in the Western Isles and I have been raising with Scottish Ministers the fact that too many of them have been falling through the cracks.

“While this funding will obviously not replace income lost as a result of the impact of the coronavirus pandemic on this year’s tourist season, I hope it does go some way towards helping island B&Bs.”

The Federation for Small Businesses Highlands & Islands Development Manager, David Richardson, said: “I have been approached by a range of long-established and well known B&B operators during this crisis, all very concerned that they were missing out on Scottish Government support because they did not have business bank accounts.

“There is absolutely no reason why they should, and it seemed very unfair that they were being refused funding on a technicality.

“FSB Scotland is campaigning hard to ensure that cracks in the support mechanism for smaller business are filled in, and we are sure that right across the Highlands & Islands, many, many B&B operators will be drawing a huge sigh of relief at this news.”

Businesses across the country have now been awarded more than £100 million through the Scottish Government Business Support Fund.

The scheme, announced by Cabinet Secretary Fiona Hyslop at the end of April, has to date helped more than 2,500 businesses and 4,160 self-employed people.

Now the fund, which started with £100 million of grant support for individuals and companies affected by COVID-19 and has since been topped up to £185 million, is being expanded.

Small B&Bs, who were ineligible for other support due to not having a business bank account, will be able to apply for a share of £3 million of funding which has been re-purposed from the Newly Self-Employed Hardship Fund.

This funding for small B&Bs will be administered by local authorities and applications are expected to open on 15 June.

Economy Secretary Fiona Hyslop said yesterday (Tuesday June 2): “On 30 April, we launched a £100 million package across three business support funds offering targeted support to the creative, tourism and hospitality sector, SMEs which are vital to their local economies, and the newly self-employed.

“One month on and we have awarded more than £104 million of grants supporting over 2,500 businesses and 4,160 self-employed people.

“We have topped up these funding streams by a further £85 million given the volume of  applications received, and these additional funds will enable us to reach more businesses in need.

“Today I announced that £3 million of the Newly Self-Employed Hardship Fund allocation will be re-purposed to support B&Bs who were ineligible for other support due to not having a business bank account.

“These businesses are an important part of Scotland’s tourism sector, particularly in rural areas, yet were not eligible for support from the hardship fund. I hope this change will help ensure they are ready to welcome visitors once again as soon as circumstances allow.

“This support is not available to equivalent businesses in the rest of the UK and is another example of how the Scottish Government is reacting to meet the needs of businesses during the coronavirus pandemic.”

The funds which make up the £185 million support package are as follows:

  • £34 million Newly Self-Employed Hardship Fund, managed by local authorities, allocated to the newly self-employed who are ineligible for UK support (as they became self-employed since April 2019) but are facing hardship. As of 15 June, £3 million of the Newly Self-Employed Hardship Fund allocation will be re-purposed to support B&Bs who were ineligible for other support due to not having a business bank account
  • £30 million Creative, Tourism & Hospitality Enterprises Hardship Fund, managed by the Enterprise Agencies with support from Creative Scotland and VisitScotland for small and micro creative, tourism and hospitality companies not in receipt of business rates grants of up to £25K 
  • £120 million Pivotal Enterprise Resilience Fund, managed by the Enterprise Agencies providing bespoke grants and wrap-around business support to viable but vulnerable SMEs who are vital to the local or national economic foundations of Scotland

The Scottish Government is also providing £1 million to top up Creative Scotland’s Bridging Bursaries scheme in the not-for-profit sector.
The Pivotal Enterprise Resilience Fund and the Creative, Tourism & Hospitality Enterprises Hardship Fund have now closed to applications.
The Newly Self-Employed Hardship Fund remains open.
Businesses can visit FindBusinessSupport.gov.scot for the latest information on funding opportunities.

(Further reaction to the announcement has been added to this article since it was first published)