LCCI polling shows covid-19 impact on London business

New figures out today from London Chamber of Commerce and Industry (LCCI) shine a light on the impact of Covid-19 on the capital’s businesses, including the use of the furlough scheme, the ongoing threat of redundancies, and permanent business change.

LCCI worked with Savanta ComRes to interview 500 London business leaders online between April 30 and June 2 2020 about the impact of Covid-19 on their business.

Headline figures show:

  • 28% of London businesses have furloughed at least one member of their staff.
  • A much higher share (64%) of larger companies (10+ staff) have furloughed at least one employee, compared to 24% of micro firms (1-9 staff).
  • Among the 35% of business leaders of firms that have furloughed or plan to furlough employees, 23% of this group said that unless their business’s conditions improve by the end of the scheme* they will have to lay off all furloughed staff. 
  • 39% of those have furloughed or plan to furlough employees said that unless conditions improve by the end of the scheme they will have to lay off some furloughed staff, and pay the wages of those who are retained themselves.
  • 13% of business leaders said they thought they will make shifting to working from home completely and not using a permanent commercial office standard practice once the lockdown has ended.
  • 9% have permanently closed physical premises.

Richard Burge, Chief Executive of London Chamber of Commerce and Industry, said: “The Government’s economic support package has been unprecedented and business is grateful for the support during this difficult time.

“Our research shows close to a third of London businesses using the furlough scheme, but also the ongoing risk of redundancies amongst those firms if economic conditions haven’t significantly improved as the scheme is scaled back.

“It is clear already that sectors like aviation, tourism, hospitality and leisure are going to see a delayed recovery. We urge the Government to stay open to the need of targeted sector support.

And one measure that the Government could implement now is to raise the rateable value cap from £51,000 to £150,000. This will allow over 19,000 additional retail, hospitality and leisure businesses in London to access business rates grant support in order to help them to survive and play a key part in the capital’s recovery.”

Commenting on the data showing increased patterns of working from home, and remotely, in London, Richard added:

“Covid-19 accelerated the realisation of many companies that their business can truly operate remotely.  These results reflect that many are now recognising that there may be a longer-term opportunity in either totally, or partially, reducing their need for an office base.  Which, if it transpires, would raise future questions about land availability and usage in parts of the capital.”

Questions were as follows:

Thinking about your organisation's workforce during the COVID-19 pandemic, which of the following statements best applies to you?

  • Furloughed at least one employee: 28%.  (64% of larger companies – ten or more employees – have furloughed at least one member of staff. 24% of micro firms – nine or less employees – have furloughed).
  • Not yet furloughed any staff, and do not plan to furlough any employees: 45%.  (47% of micro firms had not furloughed staff and were not planning to in the future. For larger companies, this share was 21%).
  • Not yet furloughed any staff, but plan to furlough at least one employee: 7%.
  • Don't know/ prefer not to say: 20%.

(For firms who have furloughed or plan to furlough at least one member of staff) If your business’s conditions have not improved considerably before the scheme is due to close, which of the following paths would you expect your business to take?

  • Will have to lay off all our furloughed staff: 23%
  • Will have to lay off some of our furloughed staff, and pay the wages of those who are retained ourselves: 39%
  • Will not lay off any of our furloughed staff, and will pay their wages ourselves: 24%
  • Don't know/ prefer not to say: 13%

How much longer do you think Coronavirus (COVID-19) will continue to impact your business for?

  • Four weeks or less: 7%
  • Two months or less: 16%
  • Six months or less: 40%
  • Over six months: 47%

How much longer do you think your business can survive in the current environment (i.e. impact of COVID-19 and governmental restrictions)?

  • Four weeks or less: 10%
  • Two months or less: 19%
  • Six months or less: 40%
  • Over six months: 38%

Has Coronavirus (COVID-19) affected your business in any of the following ways so far?

  • Have seen a decline in income / turnover / sales (i.e. revenue): 62%
  • Have postponed ongoing or planned work: 38%
  • Have lost customers: 35%
  • Have cancelled ongoing or planned work: 34%
  • Have temporarily closed physical premises: 27%
  • Supply chain has been disrupted: 22%
  • Have permanently closed physical premises: 9%
  • Other: 6%
  • Coronavirus hasn't affected my business: 13%

To what extent, if at all, do you agree with each of the following statements in relation to the COVID-19 pandemic?

  • Without alternative sources of funding (i.e. not from banks) my business won't survive: 37% Agree, 45% Disagree, 18% Don’t know.
  • Banks have supported businesses around the UK throughout the COVID-19 pandemic: 36% Agree, 37% Disagree, 27% Don’t know.
  • Alternative sources of funding (i.e. not from banks) have been more readily available than funding offered by our bank:  30% Agree, 24% Disagree, 46% Don’t know.
  • Our bank has offered the necessary financial support to keep my business going during this period:  26% Agree, 38% Disagree, 36% Don’t know.

When weighing up the economic impact of Government measures to stem the spread of Covid-19 (such as lockdown and social distancing) with the health benefits of these measures, I would say the measures…:

  • are proportionate to the situation: 55%.
  • haven't gone far enough in restricting business operations: 21%.
  • have gone too far in restricting business operations: 17%.
  • Don't know: 7%.

The COVID-19 pandemic and restrictions to prevent the spread have forced many companies to change the way they operate. Which of the following, if any, do you think your business will make standard practice, once the lockdown has ended?

  • Conducting a greater proportion of meetings virtually (e.g. via Zoom or Teams): 37%
  • Permitting employees to work from home more often: 37%
  • Reducing business travel outside of your city (domestic and international): 27%
  • Holding increased cash reserves (compared to reserves before COVID-19 pandemic): 20%
  • Having a reduced workforce size: 20%
  • Shifting to working from home completely and not using a permanent commercial office: 13%
  • None of these: 26%

ENDS.

*On May 12 the Chancellor announced an extension of the government’s coronavirus job retention scheme from the end of June until the end of October, before setting out respective details of the tapering of the scheme on May 29.

Those announcements came partway through the polling fieldwork.

Savanta ComRes interviewed 500 London business leaders online between 30th April and 2nd June 2020. Data were weighted to be representative of all London business leaders by size and broad industry sector. Savanta ComRes is a member of the British Polling Council and abides by its rules.

For interview, contact: Steven Reilly-Hii, LCCI Senior Media Relations Manager, sreilly-hii@londonchamber.co.uk