Prior to developing our APPG response, the Plunkett team had reviewed the data compiled for our recent Better form of Business research which includes the most recent annual accounts submitted by community businesses. When we scrutined the most recent surplus and deficit averages, along with the levels of reserves held by community businesses we estimate that as many as 1 in 5 community businesses are currently vulnerable as a result of the financial pressures they face.
In support of our submission we then completed a survey of our members, which showed:
- 95% of community businesses have been affected by the cost of living crisis.
- The most common effect reported is that customers are spending less (affecting 58% of community businesses).
- Over half are struggling to cover their day-to-day costs (53%).
- 37% of businesses may have to delay improvements and investments.
- Around 1 in 10 community businesses are reducing their services or hours to manage costs.
- An estimated 70,000 people in rural areas could be affected by these reductions in services, with decreased access to essential groceries, post offices, and warm spaces.
- A loss of local services and jobs will further increase the cost of living for rural residents
We also wanted to know whether community businesses felt disproportionately disadvantaged:
- 63% said that being a rural business meant they were more badly affected by the crisis
- 73% said that as a small business, they were more badly affected
As examples of this, members cited a number of difficulties, such as being financially squeezed by the price marking of wholesalers, having difficulty upgrading old or listed buildings to become more energy efficient, and lack of connectivity limiting the use of smart meters.
The upshot of the survey was simple: 83% of members felt that the UK Government needed to do more to support small, rural businesses.