Government urged to unlock COVID-19 grants for struggling beauty businesses

The government must step in and accelerate the grant distribution process for cash-strapped hair and beauty salons, many of which are on the “brink of closure” as a result of lockdown restrictions, key industry representatives are urging.

Revealing the 2021 Budget last week, Chancellor Rishi Sunak said that local authorities must spend the £1.6bn Additional Restrictions Grant (ARG) monies allocated for struggling businesses, in order to receive a further £425m cash-injection.

However, to date, only 13% of the £1.6bn ARG monies available to local authorities has been allocated to businesses desperately in need, new figures from the National Hair and Beauty Federation (NHBF) have revealed.

The NHBF, along with the British Beauty Council, British Association of Beauty Therapy & Cosmetology and the UK Spa Association, have written to the Secretary of State for Ministry of Housing, Communities and Local Government, urging the government to push local authorities to expand current eligibility criteria for ARGs and speed up the fund allocation process.

Despite being on the brink of re-opening in just over a month’s time, the various grant announcements made by Chancellor Rishi Sunak in the 2021 Budget could “very much be a case of too little too late,” if businesses did not receive funding urgently, the NHBF said.

“We highlighted in our evidence to government that salons are literally on the brink of permanent closure, unable to take on any more debt to meet the deficit between their fixed outgoings and the current grants and reliefs.

"Without an immediate cash injection, many will not make it to the point of reopening,” NHBF chief executive Richard Lambert said.

“The frustrating thing is it doesn’t have to be this way. There is a significant pot of money available to struggling businesses via the Additional Restrictions Grant, which central government has given to local authorities to hand out.

“The problem we have is that councils have been holding on to this money or setting the eligibility criteria too narrowly, meaning that the money is not getting to those that need it.” Lambert added.

While welcoming the Restart Grants, personal care sector representatives were “bitterly disappointed,” that the Chancellor did not cut VAT for hair and beauty businesses in his Budget, despite the COVID Coalition showing the move could be cost neutral for the Treasury.