On 29 May, the government announced that they were working with leading businesses and trade associations to publish a new code of practice for landlords and high street businesses. The code is set to provide clarity over rent payments and encourage cooperation within the sector.
The Foundation eagerly awaits this code and we hope it is accompanied by a Furloughed Space Grant Scheme (FSGS), which is being proposed by the British Property Federation and British Retail Consortium. Such a scheme would act as a ‘rent support scheme’ providing payments in lieu of commercial rents for a short period of time. A similar scheme has already been successfully rolled out in Denmark and Sweden, which gives us confidence that it could work in this country.
Why we’re backing FSGS
As we take our first tentative steps out of lockdown, some of Letchworth’s retail, leisure and small businesses are facing an uncertain future. With small margins, little or no income for several months and low consumer confidence, for some, the road to recovery will be long.
When lockdown was announced on 23 March, we could see the impact it was having on economies across Europe. To mitigate, we quickly moved to support our most vulnerable small business tenants who were forced to shut. We offered them a rent-free period and all other SME tenants have been offered a facility to defer a significant proportion of rent during the lockdown period and beyond.
On the surface, there is plenty of support available, from government-backed grants and loans, to rate relief and smaller individual support arrangements. The government’s job retention scheme was a welcome relief to many. Indeed, at the Foundation we made use of these schemes to support our staff impacted by the closure of our venues and services.
As welcome as this support is, there is a devastating scenario playing out with our retail, leisure and small business tenants. While many people have had their incomes protected by the government, they potentially won’t have a job to return to once furlough ends. Credit lines have been withdrawn by suppliers, supply chains disrupted, and customer confidence (both b2b and b2c) is at rock bottom – it is clear more support is needed.
We are also hearing from many of our tenants who run smaller businesses that applying to use debt facilities or accessing the new debt-based schemes is simply not an option. This is mainly because of market instability and the risk of additional debt being too much of a burden.
As a responsible landlord, we are acutely aware of the position we play in supporting our tenants and in how we invest the revenue we receive from our portfolio to fund our charitable commitments within the town. The impact of businesses failing in the town will be devastating for us all.
It is for this reason we are publicly backing the FSGS proposals being put forward. We believe this scheme is the missing lifeline for our town and will make a considerable difference to the local economy and indeed wellbeing of our community.
Of course, this will impact on the UK’s national debt, but for small businesses and indeed us as a landlord we see this as a potential lifeline; a chance to keep businesses afloat. Crucially not just high street retail shops, but those small businesses of which we have many in Letchworth. We are not asking for a money tree or a magic wand. The FSGS programme will see tenants, owners, lenders and government work collectively and the cost burdens shared by all parties.
The only way through is working collaboratively and I am incredibly proud how as a business community in Letchworth we have come together.
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